Notice on the chart above how the market opened much higher than the previous candle close. This gapping up action made price open right at a daily resistance level on the EURGBP, which was instantly rejected by the bears. The bearish rejection continued all session and the candle closed as an Outside Candle.
A breakout trap & reverse trade was also triggered here, as price breached the prior candle low’s last session.
The market is in a clear downtrend here, and the Outside Candle formed right at the trend mean value, which is a fantastic area on the charts to consider entering trend momentum. If the market breaches the outside candle low, then we contemplate further bearish price movements.
The only trouble area to watch, is the support level below. Also watch out for breakout traps during the Asian session trading.