Consolidation between .7100 and .7170

The pair remains subject to a sharp decline in price.

Previous Signal AUD/USD

Last week’s AUD/USD signal produced a profitable short trade on Monday from the bearish pinbar which rejected the resistance level I had identified at 0.7223.

AUD/USD Signals Today

Risk 0.75%

Professions can only be entered before 5 p.m. Tokyo time on Wednesday.

  • Go short after a reversal in bearish price action on the H1 time frame immediately after the next touch of 0.7170 or 0.7188.
  • Put the stop loss 1 pip above the local swing high.
  • Adjust the stop loss to break even once the trade has reached 20 pips of profit.
  • Withdraw 50% of the position as profit when the price reaches 20 pips of profit and let the rest of the position work.

Long Business Ideas

  • Go long after a bullish reversal in H1 time frame price action immediately after the next hit of 0.7102, 0.7083 or 0.7051.
  • Put the stop loss 1 pip below the local swing low.
  • Adjust the stop loss to break even once the trade has reached 20 pips of profit.
  • Withdraw 50% of the position as profit when the price reaches 20 pips of profit and let the rest of the position work.

The best method to identify a classic “price action reversal” is to close an hourly candle, such as a pin bar, doji, outside, or even just an engulfing candle with a higher close. You can exploit these levels or zones by observing the price action that occurs at the given levels.

Advertising

AUD/USD Analysis

I wrote on Monday last week last Tuesday that we had a pivotal resistance level at 0.7223 still in play. I thought a break down below around 0.7190 would complete a head and shoulders candlestick pattern bearish and would suggest that the price will continue to decline.

This was a good move as the resistance at 0.7223 held firmly when hit, providing a profitable short trading opportunity.

The technical chart has changed in recent days, with risky assets (mainly equities) sold off strongly before rebounding late yesterday. This movement of risk aversion then of recovery naturally reproduced itself on the Australian dollar, which is a key currency in the risk barometer. We saw the price dip and then rebound strongly at the support level at 0.7102 confluent with the round number. There are clear and obvious resistance levels above, the closest being 0.7170, which was holding the price down just a few hours ago. The price is now trading in the middle of this range and waiting for direction. Risky assets look weak and subject to further declinesdue to concerns about the Fed’s monetary policy tightening and prospect of a military conflict between Russia and Ukraine. These fears are likely to determine if price eventually breaks below 0.7100 and continues lower, or if we start to see a gradual recovery and rise.

I would be happy to take a short trade of another bearish rejection of 0.7170, or a long scalp trade another bullish bounce at 0.7100but such a scalp should be carefully monitored over a short period.

AUD/USD

There is nothing major expected today for the AUD or the USD.

Comments are closed.