Looking at a very straight forward, but major counter trend price action signal today, located on the AUDCHF daily chart.
Last session the price here tried to break higher above a weekly resistance level, but ultimately failed as the market denied the higher prices, and closed as a bearish rejection candle.
The rejection candle has a nice thick bearish body, thanks to the candle closing way below it’s closing price – this gives the candle a strong bearish anatomy.
We’re also dealing with a weekly resistance level which has recent proven to be a strong turning point in the market here.
The bearish rejection candle is an early warning sign of a potential reversal, and if one does occur – there is a lot of down side potential before the next major support level.
A correctional retracement entry would be the best entry scenario here. We need to tighten the stop loss to give the setup a realistic risk/reward ratio.
If we can get that pull back entry, will be looking to milk this trade for everything it is worth, and run for 1:6 reward.
Best of luck on the charts.
Jacques
Thank you Forex Guy. I went short on the AUDCHF as you recommended and it worked beautifully! Cheers mate
Replying to: Jacques
Steve Epperson
Congratulations. Keep listening to him. He knows what he’s doing.
Kooyar
In my opinion, the potential to the upside is much higher at the moment. Currently at 0.7709.
Replying to: Kooyar
Steve Epperson
Please keep in mind that 80% of all breakouts fail. This is just a friendly reminder to wait for confirmation of a breakout before trading it. Hope it worked out for you.
Gede
thank Sir, this price action working, as well as NZD JPY you posted before, thank a lot
Antonio Pierre
I will try it, because this make sense for me. I’ve never traded this pair, but I will take it as a new one for some time, Thanks TheForexGuy. I’ve sold it at 0.77275.