Forex Price Action – Cable Forms Outside Bar Off Role Reversal Level – Aug. 28th

After breaking out of the summer range, the cable formed a pin bar rejection at the next resistance level and has since sold off for two days.

Today it has reached the breakout level and rejected nicely off of it, confirming it as a role reversal level.  It did so forming an outside bar pattern in the process, along with a decent rejection to the downside.  If the breakout is to hold, then this level should as well. Luckily there was a decent rejection to the downside today, along with a rejection to the upside so sellers are still present.

Thus, bulls can look for pullbacks into this level around 1.5750 for longs with tight stops targeting 1.5835 and possibly another attack on 1.5900.  Bears can meanwhile look to sell rejections at this latter level as long as the price action shows weakness leading into it.

outside bar reversal pin bar price action role reversal aug 28th

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Global Market Commentary:
With the Jackson Hole speech coming this Friday, volumes and volatility levels are coming down as position paring occurs before the big day and announcement.  The Euro gained vs. the Greenback as there is more hopium going around the ECB will save everyone and continue to buy bonds from ailing countries…only to in turn take the revenue back from those countries it bought said bonds from (yes – its a ponzi scheme), just somehow legal.

Meanwhile, Spain continued to highlight its troubles as bank outflows outweighed deposits by 5% on balance.  Catalonia meanwhile requested €5B available in rescue funds without allowing conditions (perhaps beggars can be choosers).

Although one has to wonder how much of this potential new stimulus from the FED is priced in, the bottom line is Bank CEOs global investors are waiting for the lifeline and prop to the stock markets the FED does so well.

Notably, Gold sold off about $6.5 ahead of the Bernanke speech while the DOW only lost about 22pts.

Upcoming Economic Announcements:

EUR German Consumer Price Index (YoY) 12.00GMT 08.00EST
USD Gross Domestic Product (Annualized) 12.30GMT 08.30EST
USD Core Personal Consumption Expenditure (QoQ) 12.30GMT 08.30EST
USD Pending Home Sales (YoY) 14.00GMT 10.00EST
USD Fed Releases Beige Book Economic Survey 18.00GMT 14.00EST

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I'm Chris Capre, Founder of 2ndSkiesForex. I help traders of all levels change the way they think, trade and perform. As a professional trader, I specialize in trading price action. As a teacher, my passion lies in showing you how to re-wire your brain for successful trading. Want to improve your edge right now? Visit my Price Action Course page.

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