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RBA sees Australian inflation as peaked.
My previous signal on 1st March was triggered as none of the key levels were reached during that session, although the high of the day was only a few pips below the nearest resistance level at $0.6786.
Risk 0.75%
Trades must be taken prior to 5pm Tokyo time Wednesday.
- Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of $0.6748 or $0.6786 or $0.6847.
- 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.
- Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of $0.6679 or $0.6624.
- 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.
I wrote in my previous forecast that the AUD/USD currency pair was likely to rise to reach the zone between about $0.6780 and $0.6786. I thought that it might make a bearish reversal there, giving a potential short-trade opportunity.
This was a pretty good call, as the price got to within a few pips of this zone before making a bearish reversal, so entering a short trade at this reversal could have been a profitable trade over a few days.
The technical picture now is one of a consolidation pattern between about $0.6786 and $0.6679. Following the Reserve Bank of Australia’s dovish statement earlier today that in their estimation, Australian inflation has already peaked, we can probably expect the price to continue drifting downwards until it reaches the lower boundary.
As this consolidation pattern is quite well established, a long trade at a bullish bounce following the first touch of the support level at $0.6679 could be an attractive trade entry. The problem is that Fed Chair Jerome Powell will be testifying later to the US Senate about monetary policy, which could trigger volatility in the US Dollar.
Therefore, the best approach might well be waiting until Powell’s testimony and trading a spike to a reversal at any of the key support or resistance levels.
Regarding the USD, the Chair of the Federal Reserve will be testifying before the Senate at 3pm London time. There is nothing of high importance due today concerning the AUD.
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