EUR/USD – Small Rise Out Of Daily Buy Zone
Today we have seen the market make a small rise out of the daily buy zone it entered just before the market closed last Friday.
I don’t think this small move higher is the beginning of the reversal which I expect will push the market back into the daily supply zone seen above. I think it’s much more likely this is just a retracement caused the banks taking some profits off the sell trades they got placed when the market spiked higher last week. The size of this small move higher also suggests that it’s not the beginning of a reversal. Usually reversals will start with some kind of sharp movement higher or lower which will consist mainly of large range candles. The movement seen above is not considered to be sharp because the bullish candles which form the move up are only small and they don’t cause the market to move a large distance out of the daily buy zone.
I still believe we are going to see another drop take place deeper into the daily buy zone before the market reverses, I’m not exactly sure how far the market is going to drop into the zone before it turns and moves higher but I would guess that it will probably be near the 1.08000 level as large reversals tend to begin when the market is in close proximity to a big round number.
USD/JPY – Moving Higher From Demand Zone
The demand zone which was in the process of forming last Friday