Evenly Balanced Ahead of Fed

Found support at $0.6750.

My previous signal last Thursday was not triggered, as there was no bullish price action when the two nearest support levels were reached that day.

Risk 0.75%

Trades may only be entered prior to 5pm Tokyo time Friday.  

• Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of $0.6781, $0.6797, or $0.6819.
• 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 entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of $0.6751 or $0.6684.
• Put 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 last Thursday that the AUD/USD currency pair was not likely to show much direction, though I had a minor long bias, so I was looking for some kind of bullish bounce following a retracement to $0.6797 for a long scalp.

This did not set up but avoided any losing trade.

The technical picture has not changed much. The price does not have any convincing direction, although it seems to have found quite firm support at $0.6750 which is confluent with a major quarter number.

We can say the price is consolidating, as is typical ahead of the major FOMC release we are due later today. There was important Australian data earlier which showed inflation falling just a little more quickly than expected, but it seems to have had little effect on the Aussie, although the currency has been a little weak today which makes sense if this is the influence of slightly weaker than expected inflation.

The price seems to be consolidating ahead of the FOMC so the best approach in this currency pair today will probably be to trade a reversal from support or resistance if the FOMC release due later causes a price spike.

Concerning the USD, there will be a release today of the Federal Funds Rate and the FOMC Statement, followed by the usual press conference, at 7pm London time. Regarding the AUD, there is nothing of high importance scheduled today.

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