EUR/USD – Rising After Retracement
The retracement I said would likely occur in yesterday’s post has took place today, but the market is now moving higher again and is looking like it will probably break through the retracement high later on tonight.
The retracement hasn’t caused the market to fall a large distance back into the up-swing, which suggests the next swing higher will be smaller than the most recent swing higher which began last Friday and ended last night. If we see the current price action stay as it is now and push the market above the retracement highs, the source of the up-move where the retracement ended will become a demand zone which we can use to watch for entries into long trades. If we see the retracement continue and develop into a consolidation, it will be a sign a potentially bigger retracement is in the works, although I think it’s unlikely based off the current price action.
For now I think you should continue watching the demand zone closest to the current market price for entries long.
USD/JPY – Dropping Back Into Yesterday’s Lows
The base which the market was building when yesterday’s market commentary was published did cause a retracement to take place last night. Unfortunately it was not big enough to push the market back into the new supply zone which had ended up forming as a result of the drop, and today we have seen this retracement come to an end and cause the market to fall back to the lows which formed yesterday afternoon.
The current price action is suggesting that a move up away from yesterday’s lows is going to take place, but we’ll have to wait and see if actually makes the market move back into the supply zone. As far as trades are concerned I’d still continue to watch the supply zone that formed from yesterday’s drop for entries into short trades. This is the most recent point where the bank traders have got sell trades placed. A substantial break beyond this point would heavily suggest the market is reversing, because it would mean that whatever sell trades the bank traders had got placed to cause the drop to occur must now be closed.
AUD/USD – New Lower Low Followed By Sharp Move Higher
Today we have seen the market make a new lower low after breaking through the current low which formed last Friday. I said how a break of this low by more than 40 pips would be a sign we are likely going to see more down movement take place during this week, but the fact that it’s only broken it by 16 pips means that it’s still possible we could see a move to the upside develop in the coming days.
After the market broke through the low a sharp move higher began, and this move higher has pushed the market back into the supply zone which I said in yesterday’s post would be suitable for trading if the market managed to break the low by 40 pips. The fact that the low wasn’t broken by 40 pips means that at the moment it’s not a good idea to look for trades inside the supply zone, and you should instead continue watching the supply zone inside the daily supply zone for entries short.
Leave a Reply