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Risky assets showed a small recovery over today’s Asian session.
My previous signal on 15th February was not triggered as the bullish price action took place below the support level which I had identified at $0.6886.
Risk 0.75%
Trades may only be entered before 5pm Tokyo time Friday.
- Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of $0.6847, $0.6895, or $0.6936.
- 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 entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of $0.6790 or $0.6723.
- 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.
I wrote in my previous forecast that the AUD/USD currency pair was looking more bearish after breaking down below $0.6950, and the price seemed to be heading for the nearest support level at $0.6886.
This was a good call, as the price continued to fall during the day and traded even lower than $0.6886.
Today, although the price has continued a downwards trend over the past week or so, albeit with deep bullish retracements, we see over the shorter-term that the price has made a bullish bounce near the support level at $0.6790 which is shown within the price chart below. The price is currently near to the resistance level at $0.6847, with the confluent half number at $0.6850 looking highly likely to be today’s pivotal point.
As $0.6850 looks so pivotal, and as we may be seeing the start of a stronger bullish recovery of risk sentiment, I will be prepared to take a long trade here if we get two consecutive higher hourly closes above $0.6850 later. Alternatively, a firm bearish reversal from a failed test of this level could give a good short trade entry, but any downwards movement is likely to be relatively choppy so could be a more difficult trade to stick with.
If today’s US Preliminary GDP data comes in notably higher than the anticipated 2.9% quarterly growth, this could give the US Dollar a boost and push the price down during the New York session, regardless of the presence of any nearby support levels.
Regarding the USD, there will be a release of Preliminary GDP data at 1:30pm London time. There is nothing of high importance scheduled today concerning the AUD.
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