EUR/USD – Still Falling Lower
The price of EUR/USD is still falling but we are beginning to see more and more signs of profit taking enter the market.
You can see there has been a clear change in market structure from when the price was falling in the green box to how we have seen the price fall since. When the price was falling in the green box we saw very little buying taking place and the price was falling quite rapidly with multiple bearish large range candles. Since that drop came to an end we have seen the price fall at a much steadier rate and have seen much more evidence of buying entering the market.
If we see a bigger drop take place it should create a supply zone which we can use for a possible short trade. We must be careful though as the retracement could come to an end and the price might suddenly start moving higher again, if that happens we’ll have to be quick to close our short trade and make what profit we can before trying to get a long trade placed.
USD/JPY – Moving Higher After Failing To Close Below The Low
We did see the price break the low yesterday but we didn’t see the market actually manage to close below the low itself.
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Like I said in Wednesday’s post, a low or high for that matter is only confirmed to be broken when we have seen multiple candles close below it or above it if it’s a high. Although the market did make a new low yesterday, it didn’t close below it, so the price still had a high chance of moving higher which is what it spent most of yesterday and today doing.
Today’s move higher managed to break some old highs made back on Wednesday which should suggest the momentum is back to the upside but I’m not convinced that price is about to start making big moves higher, I think its far more likely for the price to now consolidate before breaking down below the low next week.
AUD/USD – Falling Into 1 Hour Demand
AUD/USD has continued to fall today and is now approaching a demand zone which formed back on Tuesday
This demand might just do the job of pushing the price on its way back up to the highs of this current move down. Of course a bullish engulfing candle is needed in order for us to enter a trade at the zone, until one of them appears we can’t take a trade. If this zone fails to cause the market to move back to the highs of the retracement then there’s the possibility of the price falling deeper into the daily demand zone before turning and moving higher.
For now watch to see what price action develops when the market enters the daily demand zone. We need to see definite signs of buying i.e bullish candles – bullish pin bars and engulfing bars in order to determine whether the market is likely to move up once it enters the zone.