Forex Overnight Preview-Trading Plan For The AUD/USD - Forex News by FX Leaders

Forex Overnight Preview-Trading Plan For The AUD/USD

Posted Monday, November 6, 2017 by
Shain Vernier • 2 min read

It is not uncommon to see tight trading ranges and rotational market conditions across the majors on Monday morning. For today’s session, rangebound markets have been the rule. Sometimes muted action is a welcome break from the periodic turbulence of the forex. Updating the trading journal, planning and even taking the day off are not bad substitutes for staring intently at a quiet trading screen.

Rest assured, things won’t stay calm forever. Let’s take a look at the key events occurring in the U.S. overnight and pre-market hours:

  • Reserve Bank of Australia (RBA) Interest Rate Decision

  • Germany’s Industrial Production

  • U.S. Redbook Index

By far, the RBA announcements are the headliner of this group. Experts are projecting rates to be held steady at 1.5%. If there is a surprise, then volatility facing the AUD/USD will be on full display.

 

AUD/USD Technicals

The AUD/USD has been in a pronounced downtrend for over two months. Last week’s trading range was a tight one, with volume gravitating towards .7675.

AUD/USDAUD/USD, Daily Chart

Here are the key levels moving forward:

  • Resistance(1): 38% retracement of current wave, .7728

  • Resistance(2): 20 Day EMA, .7741

  • Resistance(3): Bollinger MP, .7759

  • Support(1): Swing Low, .7624

  • Support(2): 38% yearly retracement, .7628

Bottom Line: The AUD/USD is exhibiting sideways price action on the daily timeframe between two support and resistance levels. However, price is poised to move directionally as a result of the coming RBA news release.

Currently, the market is waiting to see what the RBA does. I am partial to the AUD/USD breaking to the bear under last week’s low of .7638. Using the high of today’s closing range as the initial stop, a short under the swing low (.7624) from .7623 is capable of providing a position yield of 100 pips.

If this trade goes live, be sure to check back for management tips for limiting risk and maximising the upside potential of the open position.

 
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About the author

Shain Vernier // US Analyst
Shain Vernier has spent over 7 years in the market as a professional futures, options and forex trader. He holds a B.Sc. in Business Finance from the University of Montana. Shain's career includes stretches with several proprietary trading firms in addition to actively managing his own accounts. Before joining FX Leaders, he worked as a market analyst and financial writer.
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