Looking at a large bearish rejection candle that formed on the EURAUD daily chart at the end of the New York business close. A few things really stand out here as a potential bearish trading opportunity.
Firstly we’re working with a major weekly level here. These weekly levels are where big reversals kick off from. Secondly, we’ve got rejection candle with a very strong bearish anatomy, specifically the thick bearish body.
The rejection candle communicates to us that sellers are coming into the market around this important level and taking control. If this setup does sell off, we need to watch the potential swing level below. If that swing level breaks, then this trade will have plenty of room to mature into deeper profits.