EUR/USD – Falling After Spiking Supply Zone
Today EUR/USD has continued to fall after it spiked the supply zone which formed because of yesterday’s drop.
The spike into the zone occurred a couple of hours after yesterday’s market commentary was published, unfortunately there wasn’t any signals to go short when the market hit the zone which meant getting a sell trade placed wasn’t possible. With the drop from the zone continuing for most of today it’s looking like the market will now fall into the point where the big spike higher originated from on Tuesday evening.
If another move higher begins when the market enters the point where the spike started from, it’s likely the price will rise back into the supply zone which has caused today’s down-move to take place. When the market enters this zone watch for a bearish engulfing candle to form before going short.
USD/JPY – Inside Daily Supply Zone
USD/JPY has climbed further into the daily supply zone it first entered yesterday afternoon.
So far we haven’t seen any retracement take place but I still think it’s likely based on the fact EUR/USD is close to the point where 4 previous up-moves have begun from and AUD/USD is very close to entering a demand zone on the 1 hour chart. If USD/JPY starts to fall from the daily supply zone it would make sense that AUD/USD and EUR/USD would start to rise from their respective locations as well because there all currently found at points where they could potentially reverse from.
For now just watch for signs of the retracement beginning, we may see the market spike through the high of the daily supply zone before it starts to retrace so be on the lookout for a bearish engulfing candle to form once the market has spiked above the high.
AUD/USD – Swing Low Broken, Market Approaching Demand Zone
The swing low which the market was close to breaking yesterday has been broken today and the market is now in close proximity to entering the demand zone which formed from the banks placing buy trades back on the 21st September.
Like I mentioned above, I think we’ll see a retracement take place once the market enters the demand zone. I doubt this retracement will be cause the market to move all the way back up to the supply zone which formed on Tuesday, I think it’s much more likely we’ll see it move into the new supply zone that’s found at the top of this current drop lower. This supply zone is the most recent point where the banks entered the market and placed sell trades, if they have more sell trades left which they still need to get placed into the market they’ll probably make the price rise up into the zone so make sure to be on the lookout for any entries short that appear.