USDSGD daily chart, a bearish correction into a major support level

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 market did drop fairly heavily after price started trading on the bearish side of the mean.

Our plan was to sell any bearish signals that formed after retracements, instead the market just dropped hard down into a major support level.

Now we’ve got two strong bullish rejection candles off this major level. Looks like this bearish move was just a correction and the market wants to pick back up start moving with the dominant bullish trend again.

These bullish rejection candles are a perfect swing trade, which we can use as a frame work to build our long positions from. This is definitely one I am looking to get into next week, targeting the retracement entry.

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