EUR/USD – Reversal After Hitting Supply Zone
The market did end up breaking through the high of supply zone it had entered when yesterday’s market commentary was published. Soon after it entered, the supply zone found above was hit and the market started to fall. The drop came to an end a few hours ago when the market fell into the demand zone that was found inside the daily buy zone, a large move higher has taken place since then and we may now see the market move back up into the daily supply zone. 
Looking at the image we can see when the market entered the supply zone it produced a bearish engulfing candle which caused the reversal to take place. I did expect an up-move to occur when the market reached the demand zone found inside the daily buy zone but I definitely didn’t think it would be this big, to some extent the move higher has me thinking that we may actually see the market now break to the upside past the swing high seen at the 1.12782 level.
For now just watch to see how the price action develops, if the market enters the supply zone I’ve marked out with black lines be on the lookout for entries short as this is the most recent point where the banks might have got sell trades placed into the market.
USD/JPY – Big Spike Higher, Confusing Price Action
Last night a big spike higher occurred on USD /JPY and the price action that we have seen follow today has made it quite difficult to figure out which direction the market is likely to move in.
The zone which I said watch for entries long in yesterday’s post was broken when a big drop lower took place last night. It was only a few hours after this had occurred that we saw the market quickly spike higher. I’m not really sure what caused this spike to take place, I did check the news section on forex factory to see if any news had come out which I may have missed but there was none so at the minute I’m still not sure why the spike occurred or what it means for the market.
Overall with the current price action we have seen form in the market I can’t decide if we are going to see the price drop next week or move higher towards the supply zone, I think the best thing to do for now is wait to see what price action forms on Monday and conduct our analysis from there.
AUD/USD – Climbing Back Towards Sell Zone
AUD/USD is currently in the process of moving back towards the daily sell zone which it fell out of yesterday morning.
Similar to EUR/USD we have seen a reasonably big move higher take place over the past few hours, this move higher hasn’t been as strong as the one we saw on EUR/USD but it has managed to push the market quite a distance back to the supply zone created by last nights drop. The market could reverse at either one of the supply zones seen in the image, I’m not sure which is more likely to cause a reversal to take place so be on the lookout for bearish engulfing candles when the market enters each zone.
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