Market Commentary 02/03/16

EUR/USD – New Low, Market Still In Daily Demand

EUR/USD remains inside the daily demand zone, we a beginning to see a few signs that a move higher may be about to begin.

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Each successive lower low is falling to fall significantly lower than the previous low, sometimes this is a sign of an impending move higher, whilst I’m not saying the market is certain to move higher tomorrow its likely that it will, do not go long until you see a break above the highs marked in the image, a break above here would suggest the momentum is to the upside, therefore long trades have a higher probability of working out successfully.

When we look at USD/JPY you’ll see why EUR/USD has a high chance of advancing higher tomorrow.

 

USD/JPY – Dropping Lower After New Swing High

USD/JPY had been dropping quite rapidly for the past few hours.

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A move higher this morning pushed the market above the highs made yesterday, after consolidating for the rest of the morning and a small part of the afternoon, the market finally fell when the ADP news was released. This down-move managed to make a new low and the candle which broke the low turned into a bullish pin bar.

As expected this pin bar failed to proved any up-movement and currently the market is beginning to decline lower.

If the move lower continues throughout tomorrow expect EUR/USD to rise out of the demand zone, weakness in USD/JPY means strength for EUR/USD

Tomorrow the resistance level marked on the chart will be a good place to look for entries short, if the move lower does get underway look to take some profits off your position when the market reaches the demand zone found at the 113.053 level.

AUD/USD – Entering Daily Supply

Last nights GDP announcement has sent AUD/USD on a large move higher, the market is now inside the supply zone found on the daily chart

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An opportunity to get long presented itself when he market returned to a demand zone created when the market pulled back slightly.

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Looking at the 15 minute chart the entry into this trade came from a bullish engulfing candle which formed when the zone was spiked, if you failed to catch this entry then there was another chance to get long from the engulfing candle seen on the 30 minute chart, if you managed to get into any of these trades now would be a good time to take some profits off your position, its likely the market will encounter resistance at the daily supply zone, it may be enough to push the market down to the 0.72348 support level so keep your take profit order below this level.

Going into tomorrow I think we need to be watching the price action inside the daily supply zone for signs of a reversal.

The reversal may not be enough to change the entire uptrend but there’s a high chance it could cause some significant downside, really we need to wait for more market structure to present itself, at the moment we do not have any recent swing lows which are close to the current price action in the market, at least one of these must be broken in order for us to see a change of momentum in the market.

 

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