Market Commentary 01/06/17

EUR/USD – Slight Drop From Current High

Last night the market proceeded to move up to the current high it was moving towards in yesterday’s post. Today we saw the market fall once it spiked towards the high, but so far the drop we’ve seen hasn’t been that sharp, which suggests that a move back up to it is likely to take place within the next few hours.

If this current move higher does cause the market to move above the high, the point where it originated from will become a demand zone we can use to look for entries long, as it will be the most recent point where the bank traders will have got buy trades placed into the market. If the move higher fails and we see the market fall back towards the demand zone in a sharp way, i.e with multiple bearish large range candles, it’ll be a sign the banks are getting sell trades placed to make the market reverse, and the focus will switch to getting sell trades placed to take advantage of a possible reversal.

 

USD/JPY – Inside Supply Zone

The break of the current low I was anticipating in yesterday’s market commentary didn’t occur last night. Instead a new move higher started when the market was around 25 pips away from the low. Currently the market is inside the supply zone I marked with a question mark in yesterday’s post, but I don’t think it’ll be long until we see it break through this zone and move into the other supply zone found above.

If it does move into the other zone I suggest you watch for entries into short trades, because if the bank traders have in fact caused this zone to form by getting sell trades placed, they’ll not let the market move past it, at least not by a large distance anyway. If we do see the market drop from the zone it’s in now I think a move down to the current low is likely to occur, although a small upmove may take place once the market reaches the low of this move higher.

 

AUD/USD – Demand Zone Broken

The demand zone which caused the move higher to begin on Tuesday has been broken today, by a sharp drop which took place after a big spike towards the supply zone occurred early this morning.

As you can see from the image, the spike which occurred when the market dropped into the demand zone didn’t cause the market to enter the supply zone I marked in yesterday’s post. The fact that it didn’t enter the zone was annoying because a good short entry would’ve been possible, then again the spike did occur at 2:00 am, so it would’ve been tough to get an entry anyway. With the demand zone broken, I now think we’re going to see a move down to the 0.73287 low take place. At the minute there doesn’t seem to be any places to look for entries short besides the supply zone that formed yesterday, so for now I’d just monitor the price action that forms over the course of tonight and tomorrow.

 

 

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