EUR/USD – Retracing After Last Weeks Drop
Last Friday we saw the price of EUR/USD fall dramatically after a wave of USD news was released in the afternoon, today the market has started to retrace as the banks look to take profits off the sell trades they got placed.
We can see the retracement began when the market opened last night, a drop down to the current low took place this morning but the market was unable to break through it and ever since then has been moving higher. I think this retracement will come to an end somewhere inside the breakout zone marked above, there is a supply zone contained within the breakout zone where you should watch for entries short as typically the market tends to turn when it reaches supply or demand zones found within breakout zones.
If the breakout zone fails to cause the market to reverse then watch the supply zone found above for entries short, I know this is a big zone so the entry may be a little difficult but you should be fine so long as you wait until a large bearish engulfing has formed inside the zone before going short.
USD/JPY – Thursdays Buy Zone Broken, Market Now Inside Lower Buy Zone
The buy zone which formed last Thursday was broken this morning by a small drop lower, the market is now close to entering the lower buy zone where we suspect the banks have placed buy trades.
The market entered the buy zone soon after it had opened last night, a couple of hours later a bullish engulfing candle formed and it seemed like the market was getting ready to rise up out of the zone. Unfortunately the bullish engulf failed to cause any up-movement and within two hours the market had dropped through the buy zone. I still think the lower buy zone is going to cause the market to move up but I reckon it we’ll see a deeper drop into the zone before this takes place.
Watch for the market to drop deeper into the zone and await the appearance of a bullish engulfing candle.
AUD/USD – Possible Consolidation Forming
Today AUD/USD has risen past the high made last Friday and I now think there’s a strong possibility we are seeing the market develop into a consolidation.
The market is currently inside the sell zone where I said to watch for entries short in Friday’s post, I don’t think this sell zone is going to cause the market to fall back towards the lows of the retracement but it may cause a small down-move to take place into the zone I’ve said to watch for entries long. If a consolidation is forming, which I strongly believe it is, the sell zone seen at the top of the image is the point where you want to watch the market for an entry short as this area falls in-line with the upper boundary of the consolidation which is where the banks have sold on two previous occasions.
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