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.
Trade Update
We recently covered a setup on the USDSGD market – a nice set of bullish price action signals that formed at a major support level.
It was anticipated there would be a nice move upwards out of this setup, and the market didn’t disappoint. We’ve only got bullish thick body bullish closing daily candles as price moved rapidly upwards last week.
We’ve only seen the first bearish candle now as the market slammed into resistance. This would be a good area to take profit on the trade, unless however you want to hold longer term, and see if the market will break through the resistance level, and push into new highs.
The only concern is a bearish rejection candle which has formed off the level – which suggests a possible sell-off. There has not been any bearish follow through from the setup yet, which means the bearish presence here might be just a small reaction to price tapping into the resistance level.
If price breaks the low of the bearish rejection candle, we could see a move lower – but for now price is looking very buoyant. The London session will most likely reveal more clues to where this market wants to go.
But for now, those who took profit on the bullish trade, congrats and best of luck to you all for this week’s trading.
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