Daily Forex Price Action Commentary by The Forex Guy

[TheForexGuy]

The GBPUSD has recently suffered a hard drop of 8 days of intense selling, moving price from a larger range structure top, sharply to the bottom support.

During the 8 day sell off we haven't seen any bullish closing days! Now the market has reached a major support level, the bulls have finally decided to step in and give us a bullish closing day - demonstrating the support level is being defended.

This has completed a 2 candle bullish rejection pattern, which is a classic reversal signal that could be the catalyst for a much needed correction.

If the market rebounds up wards, we could see a correction back to a swing level in the middle of the range, or price could complete another range cycle and re-test the range top again - which would generate good returns for this setup.

- The Forex Guy

 

[TheForexGuy]

Last week the fed ‘played their hand’, and decided not to raise interest rates in the US. It was this year’s highly anticipated news that forced the market to remain in consolidation holding patterns until the decision was announced, so investors knew where they stood.

Initially the USD weakened off the back off the release, but quickly started to show signs of strength again. On the USDSGD daily chart, we can see how there was a bearish correction into a major support level as the USD lost some ground.

Now the bulls are coming back in hard, and are defending the support level aggressively. Notice how price sold off into the level twice, but the moves lower were rejected by the market – demonstrating lower prices are not favored “hint hint”.

This denial of bearish price moves has printed two bullish rejection candles, which are strong looking price action buy signals. The closing price of the candles are higher than the open too, which is something I like to see – it gives the setup that extra bullish shine.

We will most likely see a rally out of this setup, as it aligns with the overall dominant uptrend in place here. Be careful of any breakouts that occur during the Asia session. If they do occur, make sure they don’t turn into a fake out, which would be a very bearish signal.

- The Forex Guy