EUR/USD – Moving Higher After Stop Run
Today we have seen the price move higher after hitting the sell stops which were beginning to build up around the 1.0960 – 1.0970 level yesterday.
Once the market had fallen into the sell stops a bullish engulfing candle formed and the price began to rise. It would have been difficult to trade this engulfing candle due to the volatility we are currently seeing in the market. The distance of where the engulfing candle closed to where it opened was 51 pips which means to trade the engulfing candle you would have needed a 51 pip stop-loss which is far too much risk for just one trade.
The move higher has pushed the price above the high that was made yesterday, which suggests we may see further up-movement going into tomorrow. For now our best bet is to just wait and see how the price action develops over tonight.
USD/JPY – Starting To Move Higher Again
USD/JPY has begun climbing higher after failing to break past the lows which were being made yesterday.
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The sell stops which could be seen just below the 101.364 low did not end up being hit but the market was still able to advance higher past some of the previous highs that were made at the end of last Friday. Tomorrow keep an eye out for a break above the high marked in the image, although the market is currently moving up it’s still not confirmed that the momentum is to the upside which means we must wait for a break above this high before looking for opportunities to go long.
AUD/USD – Falling After Entering Supply Zone
Earlier today AUD/USD rose up into the supply zone which I identified in my last post and is now starting to fall lower.
On the 30 minute chart we can see how upon hitting the supply zone a bearish engulfing candle formed. This engulf could have been used for an entry short as it was the first sign we had of the banks being interested in getting sell trades placed in the market or if you missed the chance to get entered upon seeing the engulf you could have used the engulf as its own supply zone and awaited the markets return to the zone like I explain in my second chance supply and demand zone article.
Now we are seeing the market fall our focus is on whether the price will be able to drop below the swing low marked in the first image. A drop below here would tell us more downside movement is to be expected over the coming days.