The AUD remains vulnerable to a sudden deterioration of risk sentiment.
My AUD/USD signal last Tuesday was not triggered as none of the key support or resistance levels were reached that day.
Today’s AUD/USD Signals
Risk 0.75%
Trades may only be entered prior to 5pm Tokyo time Friday.
- Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 0.7293 or 0.7321.
- 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
- Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 0.7157, 0.7082, or 0.7006.
- 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 last Tuesday that unless we get some news of a deal that will prevent war, I think that today will be a down day in this currency pair. A conservative approach would be to wait for the price to get established below the support level at 0.7082 and then use it as resistance for a trade entry point.
I was wrong about Tuesday being a down day, although I was on the right track as reports Russia was beginning to withdraw some troops that day began to boost risk sentiment slightly. There has been a growing sense over the past 48 hours or so that a Russian invasion of Ukraine is unlikely to happen. However, being realistic, we must expect that sentiment will probably see-saw on this for another two weeks or so before things become clear one way or the other. This suggests that we are going to see choppy trading during this period, as the AUD is very sensitive to global risk sentiment.
The price has not only moved higher since Tuesday but has also printed a new higher support level at 0.7157. The price has room to rise now until the inflection point at 0.7250 confluent with the big quarter-number.
I think the most likely outcome here today is a continued choppy rise to 0.7250 if the new support level at 0.7157 holds.
There is nothing of high importance due today regarding either the AUD or the USD.
Source link
