Market Commentary 05/04/16

EUR/USD – Consolidation Developing

The market didn’t end up breaking the swing low and the market is now developing into a clear defined range.

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The supply zone which the market hit yesterday failed to push the market below the demand zone, instead the market came back up to retest the supply zone which It wasn’t able to penetrate, after two attempts to break lower the market finally fell early this morning and the demand zone was broken.

It looked as though a break below the swing low was about to take place with the market suffering a large drop into the lows themselves, a quick recovery took place which has now established the lows as the lower boundary in the consolidation. It seems likely for the market to move up from here back to the upper boundary where the supply zone is located, if we do see a return to this point watch for price action signals to get short into the movement back down to the lower boundary.

 

USD/JPY – New Lower Low On The Daily Chart

 

USD/JPY has broken the lowest low which made up the consolidation the market has been in for the past 36 days, we now have a situation where the downmove could be accelerated by heavy selling.

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We have seen bank traders take some profits today as evidenced by the bullish candle which appeared mid-day, its probable they took profits using sell orders placed by breakout traders for when the market broke the low. Due to the nature of the way the market has been moving down for the past couple of days I think we may see a pullback or another consolidation take place in order for the bank traders to get more sell trades placed in the direction of the trend. If a consolidation begins its unlikely to be as big as the previous consolidation the market was in which lasted 36 days, I think It’s far more likely to be a two or three-day consolidation.

Tomorrow keep watch to see if the market continues to fall lower, at the moment we do not really have any decent levels we can use to watch for price actions signals short so all we need to do for now is wait to see how things develop over the next few days.

AUD/USD – Lows Broken, Market Reacting To Daily Supply Zone

 

Yesterdays lows did end up being broken by the market and over the course of last night and today the market has dropped significantly.

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Now the market has begun reacting to the daily demand zone, so far we have big bearish candle drop into the zone with next candle being an equally big bullish candle, if the market rises from where it is now its likely we’ll see a reaction at the breakout point and a move up to here would reveal buyers intent in wanting the market to continue moving higher from the demand.

Watch how the price action develops over tonight, a sharp move up from demand would signal further upside movement but we could see a deep pullback take place to the lows of the demand zone.

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