cadjpy bearish rejection candle after counter trend rally

First thing we do when we open our charts is scan the trending markets for signals, because this is where the highest probability trade setups form and produce the best returns.

A nice bearish rejection candle was created when price tried to rally through a resistance level. This move was terminated when price ran into the 20 EMA (our strong trend mean value price) . This breakout trap seen price close negative for the day creating out signal.

This is the ideal location for a short signal to form in this market, the rejection of the trend mean and a resistance level provides a high level of confluence here, this gives good the trade good value.

If price can breach the lows we could see the down trend continue and see another bearish extension of the overall trend. Just be mindful of the support level located below, it could prove to be a strong obstacle here. Watch for any counter trend signals at this support which may terminate the bearish movement.

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