EUR/USD – Reversal Taking Place
Today we have seen the market drop out of the daily supply zone it has been consolidating in for the past few days and break through the lows of the demand zone I drew in yesterday’s post. The fact the market has broken these lows by quite a large distance leads me to believe that we have seen the market reverse out the daily supply zone and it is now going to continue falling down to the demand zone marked on the bottom of the image.I think we’ll see some kind of reaction take place once the market reaches this demand zone. It might not be a big reaction but it might be enough to push the market up into a supply zone or sell zone that forms during the move down. The drop out of the daily supply zone has created a new supply zone we can use to look for short trades, but I don’t feel like the market is going to return to it now after dropping such a large distance below the lows of the demand zone.
The goal now is to wait for more supply zones to form during the move down into the bottom demand zone. Although the drop out of the daily supply zone is a signal the bank traders have got sell trades placed at the highs of the consolidation, it’s unlikely they’ve been able to get all of these sell trades placed, which means a move back up to the highs or another point that’s yet to form is likely to take place as they look to get the rest of their trades placed into the market.
USD/JPY – Out Of Daily Demand Zone
USD/JPY has today moved