EUR/USD – Consolidating Near Last Weeks High
Today we have seen the market continue to consolidate near the high which formed at the end of last week. The consolidation itself started when the market re-opened for trading on Sunday night. Initially I though the reason the consolidation was occurring was because it was a bank holiday, but the fact that it’s continued today, leads me to believe that it might be because the banks want to see what the results of the French election are before making a decisions on what they should do next.
You can see from the image that another drop into the zone I said to watch for entries long occurred last Friday, but sadly the resulting up-move wasn’t enough to push the market above the highs made on Thursday. As far as trading opportunities are concerned, at the moment I can’t really recommend getting any trades placed due to the French election.
USD/JPY – Small Move Out Of Daily Supply Zone
The up-move which began inside the daily supply zone at the end of last week has today caused the market to break through the upper edge of the zone. Although the upper edge has now been broken, it does not mean the supply zone has failed and that we’re now going to see the market continue to move up over the coming days. All it means for now is that we could potentially see a reversal occur slightly higher than what was initially anticipated.
You can see that over the past couple of hours some bearish price action has started forming. Whether or not this price action is a precursor to more down movement remains to be seen, but I think that if we do end up seeing more down movement occur, the demand zone which has formed inside the daily supply zone is a point where you can expect to see a reaction take place. I don’t advise watching the zone for entries long at the moment, due to the election, but I definitely believe that a reaction will occur when the market reaches the zone, so be aware of that if you have any short trades open now or plan to get any placed over the coming days.
As is the case with EUR/USD, I can’t advise getting any trades placed at the minute due to the election, so just keep an eye on the price action for now.
AUD/USD – Falling After Hitting Supply Zone
Yesterday a large move higher took place on AUD/USD and pushed the market into the supply zone I marked in last Thursday’s market commentary. Today we have seen the market fall out of the zone, but so far I’m not convinced that this drop is the beginning of a reversal back to the downside.
The reason why is because we’ve not seen a sharp drop take place nor have we seen multiple swing highs form at similar prices to one another. The current price action is suggesting that another move up is going to occur, so it could be that another swing high is going form close to the other one as a result of this move up. If it does and we see the market drop again, I think it’s likely a retracement or small upmove will take place when the market reaches the demand zone, so hopefully that will push the market into a yet to be created supply zone we can use to get a short trade placed.