I attached the EURAUD chart with my analysis. I actually taken a long trade as shown on the 4H chart.
Please review my comments. currenlty it seems price is bouncing from supply zone. not sure if it profit taking or sell order are placed.thanks.
Response:
Looking at your image, it’s clear the market is still within the daily supply zone. But I’m not entirely convinced this supply is going to trigger a reversal to the downside.
Here’s why:
Take a look at the swing lows on the daily chart…
Those four lows are quite close together, with buying coming in around the same point. It suggests the bank traders have placed buy trades, presumably in anticipation of a significant upward movement.
My guess?
The daily supply zone might trigger a fallback to one of the buy zones highlighted in your image.
These zones are created from bank traders placing buy trades. So, if they want these buy trades to stay open and continue making them money, they’ll need to step in and add more buy trades, especially if the supply zone prompts a drop into these zones.
Keep an eye out for long entries if the market rebounds to these buy zones…
If the daily supply zone does indeed catalyze a complete market reversal, we’ll probably see multiple swing highs form before this reversal happens.
The banks would need to execute all their sell trades before the reversal occurs.
Hope this helps…
PAN.