EUR/USD – Falling After Election Results
The French election was decided yesterday, with Emmanuel Macron beating out Marine Le Pen to become the new president of France. The effect this result had on the market was much more subdued than it was when Macron won the first round of the election back in April. When that was announced a huge gap pushed the market up to highs it had not reached in 6 months, but yesterday’s result only caused a small gap to occur.
Since the market opened and the gap took place, we’ve seen the price fall towards the demand zone created by the move higher which occurred last week. I think if the market falls into this zone we will see a move higher take place. I’m not sure if the move will cause the market to break above the current high created by last nights gap, but I definitely think it will at least push the market back up to the point where the current move down originated from.
For now I’d say to keep an eye on the demand zone I’ve marked out with black lines for entries long. Watch for a reversal signal to form once the market has hit the 1.0900 level, as the market usually tends to turn after it has hit a big round number price.
USD/JPY – Moving Towards Last Weeks High
The election results had an even more minor effect on the price of USD/JPY, with a tiny gap much smaller than the one seen on EUR/USD causing the market to move back up to last weeks high.
The price action seen this afternoon is suggesting that we’ll see the market continue to move up over the next few hours and break through the high. If it does that, the demand zone which I’ve marked with a question mark will be the place where you want to begin watching for entries into long trades, as it’ll be the most recent point where the bank traders are confirmed to have got a large number of their buy trades placed.
AUD/USD – Retracement Coming To An End ?
The retracement which began at the end of last week seems to be coming to an end, with the market currently in the process of falling back to the lows that formed on Friday.
If the market breaks through the low it’ll be a sign we are going to see the price drop further over the coming days. If it fails to break them it could mean a consolidation is going to from, or a deeper retracement is going to take place. It’s not possible to determine which it’s more likely to be at the minute, so for the moment I think it’s best to wait for more price action to form before carrying out further analysis.
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