EUR/USD – Consolidating Inside Daily Supply Zone
The break above the highs we were seeing take place yesterday’s came to an end shortly after my market commentary was published. Since the break has ended we have seen the market drop again, and it currently looks to be forming a consolidation structure inside the daily supply zone.
Since we’ve still not seen any large drop take place inside this supply zone, I’m hesitant to say we’ll see a reversal occur after the consolidation has formed. At the moment you can see the price is rising back towards the highs of the consolidation, I don’t think we’ll see the market break above these highs again tonight, but we may see them broken tomorrow by a false break if buy stop orders start to accumulate just above the highs.
For now the outlook remains the same as yesterday, just keep an eye on the price action and see what the market has done by this time tomorrow.
USD/JPY – Small Retracement Leads To New Lower Low
The retracement back into the daily buy zone which I said was likely to take place in yesterday post did end up occurring last night, but has today come to an end and caused the market to drop and make a new lower low. Since the lower low was made a couple of hours ago we’ve seen the market rise back towards the daily buy zone which had been broken by the drop.
If the market manages to move back into the buy zone and break above the current high, it will be a sign that we might see a larger retracement take place back up to the supply zone found at the source of the last major drop. Although there is a supply zone found just above this supply which is technically a stronger zone, I don’t believe a retracement will be able to push the market all the way up into this zone, so I recommend that if a retracement does take place, you watch for entries short in the supply zone pictured in the image above instead of the zone found above.
AUD/USD – Drop Out Of Daily Supply Zone Continues
The drop out of the daily supply zone which began on Tuesday night has continued today, with the market managing to make a new lower low at the beginning of this afternoon. Although a new low has been made, the size of the drop which created the low was not very big compared to the drop out of the daily supply zone we saw yesterday, which is a sign that maybe we are going to see a retracement back into the zone take place sometime tomorrow or next week.
Currently we are seeing the small up-move created after the market made the low get engulfed by a bearish candle, so it could be that we see the market make another lower low before any kind of retracement back into the daily supply zone take place. As far as trades are concerned, the supply zone inside the daily supply is the still the main point you want to be watching for entries into short trades, as the banks could make the market move back into this zone as a means of getting more sell trades placed into the market.