Market Commentary 16/01/17

EUR/USD – Fallen Out Of Daily Sell Zone

In Friday’s market commentary I said how a move down to the red line would be a good sign we are going to see further downside take place on Monday. Today we have ended up seeing some more downside occur, but only just enough to push the market out of the daily sell zone, it still hasn’t reached the red line so I don’t think we’ve seen the market reverse yet, but that could change if a big drop causes the market to break through the red line later on tonight.

Tonight I’d continue to watch to see if the market breaks through the red line marked on the image. If it does then more downside is likely and we’ll probably see the market fall into the demand zone created by the move up seen on the 11th. If the market doesn’t break the red line, and instead starts moving back up towards the highs of the daily sell zone, watch for another move down to occur, as that will be a sign the banks are getting more sell trades placed into the market at the sell zone.

 

USD/JPY – Drop Back Into Daily Demand

The move up out of the daily demand zone that was taking place when last Friday’s commentary was being published came to an end later on that night as the market fell through the low of the move up just before the market closed for the weekend. Today this down-move has continued, and the market has re-entered the daily demand zone but is now sitting just on the edge of the zone after a small move out of the zone took place earlier today.

Although the market has broken through the low made on the 12th, I wouldn’t say it’s a sign we are going to see more down-movement take place, due to fact the market only managed to break the low by a few pips. Really a large break needs to take place before the new low is considered to be a signal that more downside is going to occur, at the moment this new low could have been created by the bank traders getting buy trades placed to make the market reverse, although the current price action doesn’t suggest this to be the case.

For now I’d wait to see what the market has done by tomorrow morning, if a bigger drop through the lows has taken place, we can begin looking for places to get short trades placed.

 

AUD/USD – Retracement Out Of Daily Sell Zone

Today we’ve seen the market fall back out of the daily sell zone it entered after Trumps press conference last week. We did see a small drop out of the zone take place on Friday but this was quickly countered by a large bullish engulfing candle which formed the hour before my market commentary was published. I thought we were going to see the bullish engulf push the market up through the high of the daily supply zone, but it ended up failing and falling back down to the lows of the bullish engulf.

There hasn’t really been any evidence so far to suggest the market is going to reverse out of this daily supply zone, at the moment the drop out of the zone looks more like a retracement caused by profit taking that it does a reversal caused by trade placing. This could of course all change if we see a large drop take place over the next few days, but with the price action being the way it is currently, I can’t recommend looking for long or short trades at this time.

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