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AUDCAD rejects over extended prices | expecting downward movement

audcad mean reversion opportunity

The bullish momentum that we’ve got going here on the AUDCAD daily chart fired off a large bullish power candle during Wednesday’s trading session. The aggressive acceleration of price has over extended the market and left a gap between the mean value and price itself. This gap can create good “mean reversion” trade opportunities.

Last session, the market tried to continue moving higher, but the market couldn’t maintain these prices which are considered “expensive” relative to the mean. The move was rejected and close as a bearish rejection candle. The day closed lower than the open price which is a nice finishing touch. A break of the low would be confirm bearish momentum and help confirm that a counter trend mean reversion/correction is taking place

Dale Woods

Dale Woods

The Forex Guy is an educational Forex trading blog run by Dale Woods who has been a passionate retail Forex trader for over 6 years. Dale trades the Forex market exclusively with price action based methodologies, believing price action trading to be one of the powerful approaches used the market today, and really is the core foundation of any good trading system. Dale also strongly believes in keeping charts clean and keeping things simple, logical and uncomplicated. By making trading decisions straight off the raw price action data, you can ‘bypass’ unnecessary variables like exotic indicators, trading robots or magical pivot levels. Dale enforces the idea that there is hardly any edge trading news and economic data releases and much prefers to make trading decisions straight from the candlestick themselves. ‘The Forex Guy’ is dedicated to providing knowledge to serious and passionate traders who want to learn the art of price action trading, positive geared money management and how to psychologically condition themselves to become a professional trader.