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The market is awaiting US CPI data.
My signal yesterday gave a long trade from the bullish outside candlestick which rejected the support level I had identified at 0.6926. This trade is only a few pips in profit so should probably be closed.
Today’s AUD/USD Signals
Risk 0.75%
Trades must be entered prior to 5pm Tokyo time Thursday.
- Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 0.6996, 0.7030, or 0.7059.
- Place the stop loss 1 pip above the local swing high.
- Move the stop loss to break even once the trade is 20 pips in profit.
- Remove 50% of the position as profit when the price reaches 20 pips in profit and leave the remainder of the position to ride.
Long Trade Ideas
- Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 0.6926 or 0.6885.
- Place 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.
- Remove 50% of the position as profit when the price reaches 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 yesterday that I saw the next key development to watch for now as whether the big round number at 0.7000 would hold as resistance.
I was seeking to enter a short trade from a bearish reversal at 0.6996 especially if 0.7000 was rejected.
Yesterday was a very quiet and consolidative day, as risk-off price movement mostly ebbed into a general consolidation. The resistance at 0.6996 was not reached, so we still have a generally bearish condition as a narrow consolidation at the end of a downwards thrust, but the supportive area at 0.6926 has held twice, which may become a bullish double bottom.
The odds still favour bears over bulls, but it seems that the next major movement will not come until after today’s US inflation data release and will be quite dependent upon it. The consensus forecast is that the annualized rate will finally fall from month to month, with a rate of 8.1% expected, down from last month’s 8.5%. If correct, this would suggest inflation may have already peaked, which will probably boost the AUD at the expense of the USD. However, if the rate comes in higher than expected, we will likely see a breakdown below 0.6926, especially if the rate is higher than last month’s 8.5%.
Concerning the USD, there will be a release of US CPI (inflation) data at 1:30pm London time. There is nothing of high importance scheduled today regarding the AUD.
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