EUR/USD – Moving Deeper Into Daily Supply Zone
At the end of last week we saw the market move back into the supply zone that formed as a result of the market dropping out of the daily supply zone on the 17th January. Today this supply zone has been broken and the market is now moving deeper into daily supply zone which means we could see a reversal out of the zone take place quite soon.
We are seeing the market drop a little now it’s entered the zone, but I don’t think this drop is the start of a reversal back out of the zone, I think it’s the banks taking a little more profit off their buy trades before they get their sell trades placed to cause the main reversal to occur. The main bulk pf the sell trades they got placed to cause this daily supply zone to form were placed above the 1.07663 level. If we are going to see a reversal out of this daily supply zone take place, I think a move above this level will occur first so keep an eye out for entries short if you see the market break through the level later on tonight.
USD/JPY Reacting To Demand Zone
The fall back towards the daily demand zone we we’re seeing take place when Friday’s market commentary was published continued until the market closed for the weekend. The drop caused the market to break through the demand zone which had formed after the move higher into the supply zone had took place. Today this drop has continued with the market returning to the demand zone found inside the daily demand zone. A bullish reaction occurred when the market reached the outer edge of this zone, but over the past hour more bearish price action has formed and pushed the market deeper into the zone.
There’s still a high possibility the drop into the demand zone we’re currently seeing take place has been created by the banks as a means to get more buy trades placed into the market ready for the next swing higher to occur. Because of this, I’d still suggest keeping an eye out for entries long if you see the market drop a little deeper into the demand zone, because if the banks are getting more buy trades placed to cause the market to move up, the upswing it will create will be pretty big and has the potential to generate a lot of profits if we can get a trade placed.
AUD/USD – Moving Back Towards Last Weeks High
After making a new higher high early on Friday morning the market had started to fall by the time my market commentary had been published in the afternoon. It seemed like the fall was going to continue all the way into the night when the market closed for the weekend, but what we actually saw was a move higher take place back towards the high. Today the move higher has continued and the recent price action is suggesting that we may see a new higher high made before the end of the day.
If we do see the market make a new higher high I think it’s a sign we are going to see more upside take place over the coming days, but only if the new high ends up breaking last weeks high by a large distance, if it only breaks it by a few pips and then starts to move down again, I think we’ll probably see some more down-movement occur, especially if the move down made after the new high is a sharp drop.
For now just keep tabs on what the market does over the course of tonighit.