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