AUDUSD Signal Today - 14/07: Is RBA Hike Pass Enough

(MENAFN- Daily Forex) Price action this week will be determined partly by risk sentiment in the market, and partly by the strength of a belief in an RBA August rate cut.

My previous AUD/USD signal on 8^th July produced a profitable long trade from the bullish rejection of the support level I identified at 6517's AUD/USD Signals

• Risk 0.50%
• Trades may only be taken before 5pm Tokyo time Tuesday.

Short Trade Ideas

• Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of $0.6595, $0.6615, or $0.6625.
• 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 Trade Ideas

• Long entry following a bullish price action reversal on the 1H1 time frame H1H1H1 time frame immediately upon the next touch of $0.6542, $0.6516, or $0.6484.
• 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.

AUD/USD Analysis

In my previous AUD/USD forecast last Tuesday, I wrote that this currency pair was looking bullish after the RBA policy meeting a few hours ago passed on a widely expected rate hike, but I thought that the best opportunity which might set up would be a short trade from the resistance level at $0.6552, targeting $0.6520 or so.

I was right about both – the price rose higher over the next days, but that day there was a good opportunity to trade the move from $0.6552 down to $0.6520.

The technical picture now is showing a shaky selloff after the past week of strong gains by the Aussie. The Aussie's gains were partly due to the pass on the rate hike, partly due to risk-on sentiment, and both of these factors will probably be wearing off now, so we might see more bearish price action bringing the price back to $0.6542.

The only level which looks especially strong anywhere near the current price is the support level at $0.6542, so I think the best opportunity which might set up here today would be a long scalp from a bullish bounce rejecting that level.

I think the Australian Dollar is marginally likely to have a down week this week as it was so overbought by the end of last week. We are also likely to see more bad news on tariffs which might hit the Australian economy indirectly, and also hit the Aussie as a generally“risk on” / export currency.-p

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There is nothing of high importance due today concerning either the AUD or the USD.

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