A rejection candle has formed on the Daily chart of the AUDUSD major market which the traders in the War Room have been discussing. The candle formation is reacting with a weekly support level, any signals that form at strong weekly S/R are worth mentioning since they are the major turning points of the market. The Rejection Candle Price Action setup is a reversal signal, price has rejected this weekly support hinting the bulls are ready to start driving price higher.
What’s also worth noting is that price did try to break down below the support level, this was not the true intent of the market so the bulls have kicked in to drive the price back over the support level leaving those in short setups trapped. What this usually does is wash out any left over bearish players still in play, traps them which leaves the bulls little resistance to push price higher, that’s why false breaks of major S/R can be so powerful.
However the trend momentum is still down here and this is still a counter-trend setup so it does have added risks associated with it. Apart from the false break this trend hasn’t shown many signs of exhaustion, traders who take this one should watch for bearish setups that form near the mean value.
A reminder to Price Action traders that our War Room area is now open and we are running limited $1 sign up specials, for more info go to the War Room Page.