AUD/USD: Australian Dollar is the strongest major currency
Last Thursday’s signals were not triggered as there was no bearish price action when the resistance level identified at 0.6632 was first reached that day.
Today’s AUD/USD Signals
Risk 0.75%.
Trades must be entered from 8am New York time Monday until 5pm Tokyo time Tuesday.
Long Trade Idea
Long entry following bullish price action on the H1 time frame immediately upon the next touch of 0.6683.
Put the stop loss 1 pip below the local swing low.
Move the stop loss to break even once the trade is 20 pips in profit.
Take off 50% of the position as profit when the trade is 20 pips in profit and leave the remainder of the position to run.
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 the price was likely to rise over the short-term, but a strong sell-off from the 0.6683 area was probable if it were reached. This was a good call as the price did rise that day but without reaching the resistance at 0.6683 so this was at least enough to keep out of trouble.
The level at 0.6683 did act as resistance when first hit, but was then broken and flipped to become new probable support when a strong bullish thrust pushed the price up even higher to reach a new 4-month high price a few hours ago.
There is a long way to go until any key overhead resistance levels can be reached, so the price has room to rise.
The Australian Dollar has the greatest long-term strength of any major currency, and the USD has begun to weaken everywhere, making this currency pair the hot spot within the Forex market right now.
This pair looks set to continue its rise as long as the price holds up above the new support level at 0.6683. I will be very happy to take a long trade from there if there is a bullish bounce after a retracement to this price later today.
Regarding the USD, there will be a release of ISM Manufacturing PMI data at 3pm London time. Concerning the AUD, there will be releases of the RBA’s Rate Statement and Cash Rate at 6:30am.