EUR/USD – Retracement Back Up To Broken Demand
Last Friday the market continued to drop past the demand zone which had been broken on Thursday. Just before the market closed for the weekend, a retracement back towards the broken demand zone started. Today this retracement continued, but over the past few hours looks to be coming to an end, as multiple bearish candlesticks have caused the price to drop.
If this drop continues, I think it’s likely we’ll see the market fall below the current low and move down to the point where the low that formed on the 29th May was created. I think a move up from this low is probably going to take place, but I can’t be sure until I’ve seen how the market reacts once it’s been reached. A strong reaction with big bullish candles will indicate a move back up to the current highs, but a subdued reaction with small bullish and bearish candles will be a signal the market may break through the low.
There’s no way to know at the moment so for now just keep an eye on the price action.
USD/JPY – Falling From Price Action Zone
The price action zone which caused a large move down to begin on the 5th May, caused another move down to begin last Friday. I didn’t think this zone would cause a down move as big as this to take place, but it has, and as a result it now seems like we’re going to see the market move all the way down to the lows of swing which caused the move into the zone to occur.
From the way things are looking, I think we will see the market break through the low of the swing a short time after it’s reached it. A retracement of some sort will probably take place once the market reaches the low, but it won’t be long before that comes to an end, and the market proceeds to fall into the daily demand zone found between the 108.826 – 108.126 levels.
Like EUR/USD, there’s no way to tell what the market is likely to do once it reaches this zone, so for now I think it’s best to continue watching to see what price action has formed by this time tomorrow.
AUD/USD – Consolidating Under Daily Supply Zone
The small consolidation that began last Friday has continued today, but a small bullish move higher that started this morning could suggest we are going to see the market move into the daily supply zone sometime over the next couple of days.
I still don’t think this daily supply zone is going to cause the market to reverse. If it is, then we’ll see some kind of reversal structure pattern form when the market moves deeper into the zone. There isn’t much to do for now, so just keep an eye out for if a sharp swing down takes place when the moves deeper into the zone, as that would be a good sign a reversal pattern is in the process of forming.