Market Commentary 02/09/16

EUR/USD – Declining After NFP Release

A couple of hours ago the NFP news was released and after causing an initial move higher to take place the market is now in a steep decline.

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Looking at the image we can see the market entered the supply zone which I marked back on Monday and proceed to drop out of it with the market actually in decline before the NFP was released. When the news came out the price made a sharp drop which made it seem like the market was going to move lower, this sharp drop was followed by an even bigger move higher that broke through the high of the supply zone which caused the market to move lower during the morning.

In the hours since the news was released we have seen the price fall again and it’s now looking likely that the lows are in danger of being broken sometime next week. For short trades, I would monitor the area created by the drop we have just seen take place. There’s a high chance the drop has been caused by the bank traders getting short trades placed into the market using the buy orders generated from traders placing buy trades when the news was released, if the banks want these short trades to remain open they cannot let the market break the point where they have been placed which in this case is the supply zone marked in the image, so if we see the market come back into this zone I think there’s a high chance the banks will come into the market and place more sell trades to stop the price from breaking through the high of the zone.

USD/JPY – New High After NFP

USD/JPY has broken to new highs after the release of the NFP report a few hours ago.

Aviary Photo_131173054285995435When the news came out the market dropped and hit a collection of sell stops that had accumulated around the 103.00 level. A few minutes later the market began to rise and by the end of the hour the candle had changed from being heavily bearish to being really bullish in the form of a bullish pin bar. Since the pin bar has closed the market has run higher past the high made by the bearish engulf yesterday. I think its likely we’ll see the market continue to rise over the coming weeks so the focus now is really on getting long trades placed into this upwards momentum.

AUD/USD – Large Bearish Engulf After NFP

The release of the NFP also caused the price of AUD/USD to drop and now we have a large bearish engulf in the market which has created a supply zone we can use to look for entries short.

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The sell zone which formed back on the 29th ended up being broken by the quick move higher we saw when the NFP was released, now the market is trading lower again and I think we will see the market break through the lows of this retracement by the end of next week. As far as trading opportunities are concerned the drop caused by the NFP has formed a supply zone which I think will see a retest before the market begins to drop through the lows next week. If the markets enters the zone watch for a bearish engulf to form before going short.

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2 comments

    • ForexMentorOnline
      Author

      Hi Osama

      A sell zone is a place where the banks have placed multiple batches of sell trades whereas a supply zone forms when they have only placed one batch. If the market comes back to a supply zone and moves down that zone can become a sell zone if it is found in the right placed.

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