The AUDCAD market has just transitioned into a bearish environment when a support level failed, causing prices to trade on the negative side of the mean value. The market has been stuck in a consolidation holding pattern over the last two weeks, hovering under the level which is now acting as new resistance.
A few attempts to move higher were rejected by the market, visible by the upper wicks on some of the daily candles. Last session the market made one last attempt at pushing above the resistance level. The move terminated quickly with bearish price action driving prices much lower forcing the candle close below it’s open price. The candle closed as a bearish rejection candle, which could fire off the bearish continuation we’ve been looking for here.
The market has already started to break the lows of the setup as the AUD strengthens during the Asian session. One of the benefits of price action trading on the daily time frame is that you can read the charts with clarity like this, set up your trade and walk away. Will come back to this setup in a few days and see how it worked out.