EUR/USD – Buy Zone Broken By Large Drop
The buy zone which has been keeping EUR/USD in a consolidation over the past few days has been broken by a move lower caused by USD news being released.You can see no additional moves higher ended up taking place after yesterday’s spike into the sell zone, the market just kind of ground its way down until the news came out today at 1:30pm. Now the news has been released and the buy zone has been broken the market is right next to the buy zone which caused this whole up-move to take place, I think we will see a move higher develop when the market drops into this buy zone but I doubt it will be able to push the market back up to the pont where today’s drop has originated from.
I don’t think there’s much we can do until the market has dropped deeper into the buy zone, so for now we’ll just have to see what’s happened by the time the market opens on Sunday evening.
USD/JPY – Possible Reversal Taking Place
Yesterday we saw the market spike lower after some USD news was released and last night the low of this spike was taken out which could have led you to believe the market was about to drop into the lower buy zone, but today we have seen some more lows get made followed by a large bullish candle which leads me to believe the market may now be about to reverse back to the upside.
If you read yesterday’s post you’ll remember I marked a buy zone around the two lows the market made yesterday, this zone did end up being broken but I’ve redrawn it to incorporate the two lows that have been made today as it’s my belief the banks have got buy trades placed at these lows and that if the market falls back into the buy zone drawn around these lows we’ll see the banks enter the market again and place more buy trades.
Tonight you want to watch for entries long into the buy zone drawn around today’s lows, although we cannot yet confirm the banks have been placing buy trades to make the market reverse my analysis says that it is likely which means we need to keep a close watch on the market for any entries long which may come up.
AUD/USD – Retracement Over, Market Now Moving Back Towards Lows
The retracement AUD/USD has been in for the past couple of day’s looks like it is now coming to an end with the market starting to fall back towards the lows.
The market wasn’t able to reach the sell zone which caused the previous drop to take place so there hasn’t really been any chance for us to get a short trade placed just yet. Something which is important to note is the large number of buy stops which have built up below the retracement low.
You may remember I said some sell stops would build up around the low in my post a couple of days ago, we can see these stops are found between the 0.7430 and the 0.7440 price levels. I think when the market hits these stops it will cause a small retracement to take place and the market may potentially move back up to the point where today’s highs are found. If the sell stops are hit mark an area around today’s high as this will be the place we use to look for our entry short.