EUR/USD – Bullish Pin Bar Off Support
As expected the profit taking from yesterdays up-move pushed the market lower today.
The support level we marked was hit as the market fell, it ended up producing a bullish pin bar candle on the 4 hour chart which is currently pushing the market back up again. The swing highs are now in danger of being broken next week.
We do have a daily supply zone around 120 pips away from the current market price, this zone is a place where I would watch for a more significant move down when the market eventually reaches it.
On Monday Keep an eye on if the highs or lows of this swing are broken, a break above the highs would signal more upside movement and will give us confirmation to go long, a break below the lows would suggest we re in store of another move down and we should be looking for entries short.
USD/JPY – Awaiting Signals To Go Short
After the bearish pin bar seen yesterday It was looking probable the market was going to fall today.
Instead it climbed higher, the focus now is on whether the market will break the highs of the pin or fall when it reaches the upper supply zone marked in the image.
The upper supply zone was created when the news was released on Thursday, if the banks sold when this news came out then they are likely to sell again should the market return to the zone.
Currently the market is reacting to a supply zone created by a large drop lower, we may see the price drop from here when the market opens on Sunday night, there has already been a small reaction to this zone which failed to provide any movement lower but things could change when the market opens.
All you need to do on Monday is watch both supply zones for sings of a move lower, personally I think the upper zone has a higher chance of causing the market to turn than the lower zone but of course I could be wrong.
AUD/USD – Making New Highs
AUD/USD is back on a move higher.
After dropping due to the 1 hour supply zone seen yesterday the market stopped at the 1 hour demand zone marked above.
A swift move higher then began, as the market reached the highs of the move down the price action was showing some signs of another move lower about to take place, this was soon counteracted by the CAD Unemployment change release which came out negative, since CAD and AUD are correlated the release mad AUD jump higher, breaking the highs of the swing down in the process.
Tomorrow we should keep an eye on the support level I’ve marked in the image, if some profit taking begins we could see the market retrace back to this point and give us an entry long, this support also has the additional benefit of being the place where a large amount of breakout traders would have entered into long trades, a move down to this point would be beneficial for the banks as it would make the majority of these traders lose money.