EUR/USD – Moves Higher After Bullish Pin Bar Signal
After yesterdays recovery produced a bullish pin bar on the daily chart, the move higher today has created a bullish engulfing candle.
Although this engulf candle is not the typical high probability engulf we usually see it is still an engulf.
This engulfing candle was created by the market moving lower earlier this afternoon.
After consolidating for the majority of last night, at 1.30 pm this afternoon the market dropped due to the core durable goods orders being released, the sharp drop eventually found support at the level I told you to watch in yesterday’s post.
As it ran into the support level the bounce pushed the market back up which formed a bullish pin bar, since then we have seen a big bullish candle drive the market back up to the highs of last nights consolidation.
In this post I mention how it was interesting that the move down stopped at the halfway point of the wick on the bullish pin bar, we have seen the exact same thing play out today.
If we draw a Fibonacci retracment from the high of the pin bar wick on the daily chart to the low of the wick we can see the low of the bullish pin ends almost exactly at the halfway point of the wick of the pin seen on the daily chart.
Before we start looking for entries long we need to see a break above the highs of the consolidation, if the market breaks theses highs it’ll turn the 1.10440 resistance level into a support level, this will be the place to look for signal to get long.
USD/JPY – Breaks Higher From Pullback Lows
In my last post I said the resistance level would be a good place to look for a short trade lower.
Surprisingly USD/JPY managed to put in quite a significant recovery last night, enough to actually produce a bullish pin bar on the daily chart.
The recovery was strong enough to brake the resistance level and the supply zone found just above, during the night the market continued to advance higher making consecutive higher highs.
At the moment the market is currently reacting to an old supply zone which we were initially going to use as a place to look for trades on back on Monday, a bearish pin bar has formed from the spike into this zone. We need to watch to see how the daily candle ends, if the spike produces more down-side back to the lows of the up-move, its likely a large wick will have formed on the daily candle, this would suggest the market is likely to break lower tomorrow.
AUD/USD – Engulfing Candle On The Daily Chart
The market managed to break the high talked about in the last post and after a small move lower has broken significantly higher over the course of today.
Initially when the high was breached the market dropped back to the lows of where the up-move began, this was in close proximity to the support level we were watching for trades, the market found support here and started moving higher again, this move higher has made a new higher high, whilst some selling has entered the market from the break of this high it has not been enough to push the market significantly lower.
For tomorrow a good place to watch for price action signals to get long is the demand zone marked in the image, if you see an engulfing candle within the zone it could turn out to be a good trade.