EURNZD Drops Huge Bearish Rejection Off Major Resistance
A pretty intense level of price action yesterday, for a Monday session.
The volatility seems to be driven by the G7 meetings that ran over the weekend into the start of the week. This volatility left some big price action to work with today.
We’re seeing a lot of big reversal candles on a lot of pairs – my Battle Station alerts were pumping this morning on my mobile.
The Battle Station is my price action based chart scanner, which you can download in the widget below if you’re interested to try it out.
EURNZD is one chart with price action that interests me a lot – mainly because we’re dealing with a very important resistance level in the market. A big proven historical turning point for this market.
We already seen the market produce a harsh bearish reaction of this level during the last test, and yesterday we see very sharp rejection of this level by the bears – leaving behind the bearish rejection signal on the daily chart.
If already had the Battle Station installed, there was an earlier intra day reversal candle alert on the 12 hour chart…
Unfortunately I wasn’t paying attention when the 12 hour alert was sent out.
However, we still have the daily signal to work with. But because the reversal candle is very large, we need that pull-back style entry to minimize our stop loss size, and maximize reward potential.
Best of luck on the charts!
A “Red Flag” Presented to EURNZD Bears!
This trade has push through all the levels of frustration that you don’t want as a swing trader.
Firstly there was another deep pullback after the entry was triggered, and it took a few days for this trade to follow through to the downside (when it looked like it was ready to fail). Patience paid off here at least, and we finally got the sell off.
Then we are surprised with massive bullish rejection candle, which we can’t ignore.
These is a serious statement of bullish price action, and is very likely to see follow through to the high side due to how strong it it.
Unfortunately, it’s not a good idea to stay in a short position in front of this big bullish signal. I think it is time to quit while ahead and look for the next opportunity.
Trading this as a buy signal is possible, but these large signals are sometimes harder to trade because they corner you into using a wide stop loss.
My suggestion would be to watch the lower swing trading time frames for follow up buy signals as signs of strength and jump on those.
If you would like to learn more about swing trading strategies, and trading with price action – check out my War Room for price action traders.
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