[ad_1]
Australian inflation data much lower than expected.
My previous signal yesterday was not triggered as the bullish price action took place below the support level which I had identified at $0.6719.
Risk 0.75%
Trades may only be entered before 5pm Tokyo time Thursday.
- Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of $0.6786 or $0.6847 or $0.6895.
- 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 $0.6679.
- 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 showing very pivotal support at $0.6719. I thought that if we got two consecutive lower hourly closes below $0.6719, the price would be likely to continue downwards to reach at least $0.6679.
I also thought that lower than expected Australian CPI (inflation) data would send the price notably lower.
I was right about $0.6719 being pivotal, as the price twice dipped below the level, but immediately bounced back above it within an hour or so, and then continued to rise.
I was wrong about lower CPI data sending the price down, as the price here has risen since the low data came out.
The technical picture now has changed over the past day in the following ways: the support level at $0.6719 seem to have disappeared, and the price is more bullish and looks to be heading towards the nearest resistance level at $0.6786.
I think the best thing to do now with this currency pair is to wait and see what happens next. If the price reaches the zone between about $0.6780 and $0.6786, it might make a bearish reversal there, giving a potential short trade opportunity.
On the other hand, if the price consolidates in or just below this zone for a while, and then makes two consecutive higher hourly closes above $0.6786, we could see a further rise in the price and a long trade entry opportunity. However, I would only want to go long at this stage if we see a broad risk-on rally gaining momentum as the New York session begins later today.
Regarding the USD, there will be a release of ISM Manufacturing PMI data at 3pm London time. There is nothing of high importance due today concerning the AUD.
Ready to trade our daily Forex signals? Here’s our selection of the best Australian Forex brokers worth your consideration.
[ad_2]