EUR/USD – Possible Reversal In Progress
An hour ago the price entered the supply zone which I marked out in yesterday’s post, we are now seeing what could potentially be the start of a move lower.
The move into the supply zone culminated with the appearance of a bearish pin bar, this pin is either a sign that the banks have placed sell trades or their taking profits off buy trades placed when the price dropped below the line marked in the image.
For now I think we must wait on further price action, really what I want to see is bearish engulfing candlestick form, that would suggest the momentum is likely to continue to the downside and the swing low found at the bottom of this move higher is probably going to be broken.
USD/JPY – Move Higher Creates New Higher High
The price of USD/JPY also increased today but has been declining back to the source of the move higher over the course of this afternoon.
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Ideally we need to see the swing low marked in the image broken before we come to the conclusion a reversal has taken place. In spite of this I would still keep an eye on the supply zone that formed at the top of the move lower. A move back up into this zone could provide us with an entry short in the form of a bearish engulfing candle and it might be a good trade to take as there is a high chance of this down-move being created by the bank traders placing sell trades.
In the event of the bank trader not being able to get all of their sell trades placed due to lack of buy orders they’ll make the market run back up into the area as they know it will cause people to place more buy trades. These people placing buy trades will allow the bank traders to get any remain sell trades placed.
AUD/USD – Another Higher High, Momentum Still To The Up-Side
AUD/USD has continued to make higher highs and for now it seems like the momentum is to the upside.
The current price action still suggests the banks have placed buy trades at the points I’ve marked with X’s but this could change if the market is able to break the low marked with a line. A potential place to look for opportunities to get long is the demand zone which formed at the beginning of this move higher. A drop into this zone followed by a bullish engulfing candle is a good sign the market is likely to move higher.