Market Commentary 03/06/16

EUR/USD – Huge Move Higher After NFP

A gigantic 142 pip move higher has taken place today due to the NFP news being far worse than what was initially expected.

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The move higher puts the outlook back to the upside, we are likely to now see the price to continue rising next week. Large moves like this don’t really do use any favors in terms of trade placing because we have to wait for new market structure to be created.

A large part of the reason why this move up is so big is because of the amount of traders closing losing sell trades they had place before the move up took place. We can see before the NFP came the price was declining so most traders would have been selling. It’s not only the traders on the 1 hour chart who would have been selling either, the traders on the lower time-frames will have been selling as will the traders on the 4 hour and daily charts.

When the NFP comes out all these traders on their respective time-frames are instantly put at a loss on their trades, in an effort to lose as little money as possible these traders close their losing sell trades which puts buy orders into the market that only pushes the price higher and higher.

 

USD/JPY – Large Drop Lower After NFP

The NFP also caused a large move on USD/JPY.

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The down-move confirms to us more downside is likely to be on its way next week. The next point of interest we need to monitor is the low found at the beginning of the retracement higher. A break below here is a significant change in market structure and mark the resumption of the current downtrend.

Similar to EUR/USD there isn’t any technical levels we can use to look for a potential short trade but I think we’ll see a retracement soon which is likely to create a supply zone or at least some support and resistance levels.

 

AUD/USD – Another Big Up-Move Due To NFP

AUD/USD was also affected by the release of the NFP.

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The bearish candle marked with an X is the first sign we have of bank traders taking profits off the buy trades they have been placing before the move up took place. We’ll probably see more profit taking come into the market as the price continues to rise due to the fact more and more traders will be entering long trades thus giving the banks the buy orders they need to take a larger amount of profit off their sell trades.

 

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