We recently discussed a bearish rejection candle that formed on the top of range resistance, anticipating a sell off to re-test the range support. During the last few weeks price did make it’s way down to retest the range bottom, were I personally was hoping the market would break down and develop into a full-blown bearish trend.
That’s still a possibility of course. But, last session the market did try to break down below the range bottom and trapped bears into a bad breakout position. USDJPY snapped back into it’s range boundaries, with the daily candle closing as a bullish pin bar, demonstrating respect for the range bottom.
Range traders could look to get long here and try take advantage of retracements for better entry prices. I don’t personally like range trades as the market tends to be volatile and whipsaw a lot around range containment lines.
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