EUR/USD – Falling After Small Retracement
The drop below Wednesday’s low we we’re seeing take place when Friday’s market commentary was published did not continue into the night. Instead the market started to consolidate a few hours after the market commentary was put out. When the market re-opened last night, a small retracement took place but this retracement has now come to an end, and the market is falling once again.
I think there’s a good chance we could see this drop continue and cause the market to fall below the lows made last Friday. I’m not if we’ll see it happen by the end of today, because of the fact there’s less liquidity due it being a bank holiday, but I definitely think it’s occur sometime over the next couple of days. If it does drop through the lows, a move into the demand zone is likely to take place. How the market reacts to this zone, will give some indication of what the price is going to do next.
If a strong move out of the zone takes place, it’ll be a sign a move back up to or above the current high is going to occur. If a small move out of the zone develops, it’ll mean a drop though the zone has a high chance of taking place. For now I recommend you just keep monitoring the price action.
USD/JPY – Consolidating After Retracement
Today we’ve seen the market consolidate, after the retracement that originated from the market hitting the demand zone last Friday failed to cause to the market to continue moving higher.
The fact the demand zone has still not been broken means the supply zone I’ve drawn from the drop is still not valid for trading, as there’s no way to confirm if it’s been created by the bank traders placing sell trades or from taking profits off buy trades. If the market ends up dropping through the demand zone later on tonight, then obviously the supply zone will become valid for trading, but until that happens all I can suggest you do is watch to see what market structure the price action creates over the course of tonight.
AUD/USD – Falling Towards Friday’s Low
The retracement that was taking place on Friday came to an end before the market closed. The resulting drop has today continued, but over the past few hours the market has started to move back up after falling close to where Friday’s low formed.
Whether or not this up-move is going to be sustained remains to be seen, but I think that if we see the market fall below the low back into the demand zone, it’s likely it’ll drop through it completely, or another retracement will take place once it’s fallen really deep into it. As far as trades are concerned I can’t really recommend anything with the structure being the way it is currently, so for now I think it’s best to wait for more price action to form.