The EURUSD printed a small rejection candle inline with the downward momentum. Because the rejection candle is small it is better to verify the setup with bearish confirmation via a breakout entry. Keep in mind weekly support is approaching below, which could cause a problem for anyone going short – there may be a bounce back to the mean.
If price manages to break the weekly support level, we will most likely see some further extended bearish movement into fresh lows.
EURUSD Breaks Support
This setup played out nicely – we got the bearish confirmation when our sell stop orders were triggered as price broke the low of the Rejection Candle. The market slammed into the weekly support where we did see some initial hesitation (lower wick on the candle testing the level), but price broke through without too much trouble during Friday’s trading session.
Now the level has been taken out, it has driving the bearish price action setup into nice profit, and paved the way for the next bearish trading opportunity to occur. We will be looking for bearish signals to form off the underside of the weekly level as it holds as resistance.