Last Thursday’s signals produced a possible short trade following the bearish engulfing candle rejection of the resistance level identified at 0.7594, but it wouldn’t have given a great reward to risk as there was then a very successful bullish trade from the bullish inside candle bouncing from the support level identified at 0.7556! Two winning trades in a single day.

Today’s AUD/USD Signals

Risk 0.50%.

Trades must be taken from 8am New York time until 5pm Tokyo time, during the next 24-hour period only.

Short Trade

· Go short following some bearish price action on the H1 time frame immediately upon the next touch of 0.7645.

· Place 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.

· Remove 50% of the position as profit when the trade is 20 pips in profit and leave the remainder of the position to ride.

Long Trade

· Go long following some bullish price action on the H1 time frame immediately upon the next touch of 0.7556.

· Place 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.

· Remove 50% of the position as profit when the trade is 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.

AUD/USD Analysis

Support and resistance levels are being respected, which is not surprising as there is no real directional bias to get hold of in this pair. However, the choppy action has cleared a space between about 0.7640 and 0.7560 where the price can roam easily. There is important Australian data due later, so it is probably wise to stand aside in the meantime, in case that gives the price a strong direction.