AUDUSD Rejects Asia Session Breakout – Bearish Momentum Continues
We’ve got a serious line up of new announcements from a few central banks this session which is probably going to cause this session to be very volatile.
Leading into the New York session I noticed that the AUDUSD had rejected a breakout higher that occurred during the Asia session – which is what I generally refer too as the asia breakout trap, or an asia session fakeout.
This is usually a sign of what is to come during the busier sessions, these kind of breakout traps can have good follow through in the London and New York session.
On the 4 hour chart you can see a thick bodied bearish rejection candle which was an early bird signal into the move.
Asia Breakout Failed Fuels Intense Sell Off
The asia breakout trap price action we discussed in the last part of the commentary seen very aggressive bearish follow through that session.
After the long weekend break was over, selling action intensified – producing some serious bearish pressure as price gets slaughtered to re-test a major support level.
Look how powerful these simple concepts are. First a mean reversion signal gets us in right at the top of the move – mean reversion signals are notorious for kicking off long, extended moves.
Then an ‘in your face’ asia breakout signal, completing the pattern to create a breakout trap and reverse trade signal, push the market down even harder.
It’s a great feeling when you get into trades like this where you based your trading decision of price movements themselves – not some magical indicator that you’re not sure how it’s coming up with its signals.
If you want to learn how to read price charts like this and become a confident trader. Come and join us in the war room – we have a blast in there. It’s always buzzing with activity and you get access to the price action protocol course as well, which traders thank me for every day!
Good luck on the charts.
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