We’ve been witnessing the GBPUSD getting an absolute slaughtering from the bears lately. It makes you wonder if George Soros is up to his old tricks here. Evidently the Pound weakness is felt across all the GBP pairs. The GBPJPY is really feeling pressure from the sellers as the market heavily rejects a retest of a weekly resistance level.
Last session closed as a long tailed bearish rejection candle, with a slight bearish close in the body (close price lower than the open price). This clearly signals rejection of higher prices and the market denying a move through that weekly resistance.
This is more of a neutral market at the moment with no trend to work with. Looking for a retracement entry here to tighten up the stop loss. The nearest high/low retracement strategy, from our Price Action Trading Course would be the best entry point here.
Because the tail of the candle sticks out into open price in this fashion, the previous candle high is the only other nearby point of reference here.
GBPJPY FALLS AFTER BEARISH PRICE ACTION SIGNAL
Our ‘nearest high’ retracement order was triggered on the GBPJPY daily rejection candle setup we covered in an earlier post. The retracement point was hit pretty much down the to the pip before the market reversed, and headed downwards as the bearish price action setup played out.
The weakness in the GBP has definitely been felt in the Yen cross pair. The market is looking like it’s heading down to test the support level we were originally targeting. We will use any strong counter direction bullish price action signals to get us out of the trade earlier if the market doesn’t trigger our support level target.
At the moment this rejection candle trade has worked out very well and produced some nice profit. If you would like to learn to read the market with price action analysis and identify nice trade setups like this one, check out our lifetime Forex War Room deal for serious traders.
Trade ‘Gaps’ Into Big profit at Market Open
Just a quick update on the price action trade setup on the GBPJPY daily chart we’ve been covering.
I opened the charts at the market open, and to my surprise I find the GBPJPY trade and nearly doubled in profit. The GBP has dramatically weakened over the weekend and caused negative gaps on most GBP pairs. The gap on the GBPJPY is one for the record book, and thankfully we’re on the right side of this move thanks to our earlier price action bearish rejection signal.
I took profit the second I seen where price was. As you know, the plan was to target the range bottom. It’s a bonus that the market gaped below the range support, giving more return on investment.
Myself and other War Room Traders are very pleased with the outcome of this trade. It’s a very nice start to the week and really highlights the benefits of price action trading. This market will probably correct back to it’s mean value and ‘fill the gap’. I might consider a bullish mean reversion trade here, but only if the market drops a strong bullish price action signal here to work off.