The AUD is lower after the RBA minutes release suggests a slow rate hike.
Today’s AUD/USD Signals
Risk 0.75%
Trades must be taken before 5pm Tokyo time Wednesday.
- Go short immediately upon the next touch of 0.7293.
- Put 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.
- Take off 50% of the position as profit when the price reaches 20 pips in profit and leave the remainder of the position to run.
Long Trade Ideas
- Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 0.7082, 0.7006, or 0.6963.
- Put 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.
- Take off 50% of the position as profit when the price reaches 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
The Australian dollar has been falling over the past four days and continues to inch lower and approach the nearest key support level against the US Dollar at 0.7082.
The Reserve Bank of Australia just released the minutes of its most recent policy meeting a few hours ago, which showed that the Bank is determined not to raise its interest rate until inflation and jobs are showing more momentum. Markets take this as a slightly dovish monetary policy tilt, so it is logical that this will help the Aussie’s recent bearish trend. We have seen the price trade a little lower since the release, but nothing spectacular.
Although the price looks bearish over the short and medium terms, it is worth noting that the price has lots of room to rise before it would meet any resistance, with no key resistance levels below 0.7293. This means that if we get a bullish reversal at 0.7082 later it could be a great long trade opportunity in terms of risk to reward. However, it is also important to remember that if fears persist of war between Russia and Ukraine, we will be unlikely to see a risk barometer currency such as the AUD rise much against the USD, which will be in some favour as a safe haven, not to mention its underlying strength due to its long-term bullish trend.
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, meaning day traders might profit from selling rallies when they turn bearish here, and not waiting for resistance levels to be reached. A more 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.
Regarding the USD, there will be a release of PPI data at 1:30pm London time. There is nothing of high importance scheduled today concerning the AUD.
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