Asian markets and the major forex pairs are soft this morning after a somewhat quiet day on Wall Street.

Both the AUD/USD and NZD/USD are slightly in the red after running into some key resistance levels overnight. At the same time, we also saw a slight bounce in the USD, which had been selling off sharply in recent days.

There wasn’t a heap of news to focus on, however, there were some key events. We heard from Powell at the Fed, but my thinking is that he is virtually irrelevant now and just something for the media to write about. Meanwhile, the impeachment of US President Trump continued, with little really coming of it as yet.

Key Levels

For the time being, we must look to the price action as the newsflow is limited at the moment.

The AUD/USD has been moving higher but obviously ran into the 0.7750 level and retraced. The round number levels are clear as day at the moment and we can build trades around them accordingly.

That said, the price action around 0.7700 has been very choppy. In fact, we can see that it is far from clean, but it is certainly acting as the centre and is really a magnet at the moment.

When that occurs I like to use that as an exit point rather than an entry. It is a good place to scale out. For example, if price pushes higher and fails again at 0.7750 and makes a lower high in the process, this would be a good short. Protection above and a target that is clear.

The situation is similar in the NZD/USD at the moment, with 0.7200 as the centre. We can also trade a mean reversion strategy form 0.7250 or 0.7150 back into that 0.7200.

This is all assuming we don’t hear any bombshells during the impeachment. If that occurs – all bets are off.