AUD/USD: Will 0.6500 area hold as support?
Last Thursday’s signals were not triggered as there was no bearish price action when the resistance level identified at 0.6473 was reached.
Today’s AUD/USD Signals
Risk 0.75%.
Trades must be entered from 8am New York time Monday until 5pm Tokyo time Tuesday.
Short Trade Idea
Short entry following bearish price action on the H1 time frame immediately upon the next touch of 0.6579.
Place the stop loss 1 pip above the local swing high.
Adjust the stop loss to break even once the trade is 20 pips in profit.
Remove 50% of the position as profit when the trade is 20 pips in profit and leave the remainder of the position to ride.
Long Trade Ideas
Long entry following bullish price action on the H1 time frame immediately upon the next touch of 0.6511, 0.64739, or 0.6448.
Place the stop loss 1 pip below the local swing low.
Adjust the stop loss to break even once the trade is 20 pips in profit.
Remove 50% of the position as profit when the trade is 20 pips in profit and leave the remainder of the position to ride.
The best method to identify a classic “price action reversal” is for an hourly candle to close, such as a pin bar, a doji, an outside or even just an engulfing candle with a higher close. You can exploit these levels or zones by watching the price action that occurs at the given levels.
AUD/USD Analysis
I wrote last Thursday that it looked as if the price was consolidating between about 0.6473 and 0.6390 in wide swings, with bulls and bears quite evenly matched. I thought that that the resistance level at 0.6473 seemed strong, so I was prepared to take a short trade if we had gotten another bearish rejection of that level later. This did not set up, so my analysis was at least sufficient to keep out of trouble.
Generally, the picture is quite bullish, and it is also significant that the price is holding up above the big round number at 0.6500. However, the U.S. Dollar has made a comeback during today’s London session, pushing the price down.
I think that if the support level at 0.6511 holds up, we will get a bullish turn here eventually which could provide a good long trade entry, and I will take a bullish bias if this sets up later. However, if we get a couple of hourly closes below 0.6500, I will expect a stronger fall to happen quickly.
There is nothing of high importance due today concerning either the USD or the AUD.