EUR/USD – Falling Into Daily Buy Zone
EUR/USD has continued to fall today after yesterday’s large drop lower due to the US election. The market is now right at the edge of the daily buy zone where I expect we’ll see a retracement take place once the market has fallen deeper into the zone.
You can see from the image how a small retracement took place last night. This retracement is likely to have been caused by the bank traders taking profits off the sell trades they placed to cause the large move lower to occur yesterday morning. The fact the retracement was only small suggests the banks did not actually take a large amount of profit off their trades, this might be because they are waiting for the market to fall even lower so more sellers enter the market which they can use to take more profit off their trades.
The supply zone I’ve marked on the image is a point where I think you should watch for entries into short trades. This supply zone is the most recent point where the banks got sell trades placed, if they haven’t been able to get all of these sell trades placed they’ll make the market move back up to the supply zone in order to generate buy orders which they can use to get more sell trades placed.
USD/JPY – Climbing Into Daily Supply Zone
Today we have seen USD/JPY climb into the daily supply zone which formed back on the 21st July.