The bullish momentum that we’ve got going here on the AUDCAD daily chart fired off a large bullish power candle during Wednesday’s trading session. The aggressive acceleration of price has over extended the market and left a gap between the mean value and price itself. This gap can create good “mean reversion” trade opportunities.
Last session, the market tried to continue moving higher, but the market couldn’t maintain these prices which are considered “expensive” relative to the mean. The move was rejected and close as a bearish rejection candle. The day closed lower than the open price which is a nice finishing touch. A break of the low would be confirm bearish momentum and help confirm that a counter trend mean reversion/correction is taking place