Market Commentary 05/06/17

EUR/USD – Falling Towards Demand Zone

The sharp move higher we saw take place last Friday has not continued today. A drop that occurred this morning has instead pushed the market down towards the demand zone that formed as a result of the sharp move higher taking place. The market hasn’t yet reached the zone, but the current price action is suggesting that another move down will cause the market to enter the zone later on tonight.

If it does enter the zone, make sure you watch for an entry long, because this demand zone represents the most recent point where the bank traders have got buy trades placed. If this drop has taken place because they want to get more trades placed into the market, they’ll place them at a similar price to where they’ve got the others placed, which is the demand zone, so keep a lookout for signs that they’re getting these trades placed, i.e watch for large bullish engulfing candles to form.

 

USD/JPY – Falling After Spiking Price Action Zone

The price action zone I said to watch for an entry short in last Friday’s market commentary was spiked early this morning. So far we haven’t seen much down movement take place as a result, but that could change over the coming hours if a large bearish candle ends up forming.

If a large bearish candle does form and cause the market to drop down to where the current low is found, I think there’s a good chance we could see the low broken by this time tomorrow. If a large candle doesn’t form, and the market just kind of stays as it is now, it’ll be a sign that a move up through the price action zone is likely going to occur. I don’t really have any recommendations in regards to trades at the minute, so for now just keep monitoring the price action.

 

AUD/USD – Supply Zone Broken By Move Higher

The upmove which began as a result of the NFP being released has continued today. The market has managed to break through the supply zone which I said to watch for entries short, and is now on its way to the other supply zone found above.

I think we will see a downmove take place once the market reaches this upper supply zone, but I don’t think it’ll be the start of a reversal back down to the demand zone, it’ll just be a retracement before another move higher takes place. As far as trades are concerned, there isn’t anything which I can suggest at the minute, so just keep tabs on the price action for now, and wait to see what happens when the market enters the upper supply zone.

1 comment

  1. Juan Ablan

    Hello Gentleman,

    First I am really grateful for the great knowledge that you are sharing and giving us. One of my goal, once I mastered this Forex world is to teach others for free like you do and for their economic independence. Thank again.

    AUD/USD

    You wrote “I think we will see a downmove take place once the market reaches this upper supply zone”. The upper supply zone has more than 50 hours on 1H time frame, so I wonder why we should consider a reversal on this Supply zone.
    I think the answer is because there is a Supply zone for 4 HR time frame, so if this is the case for 4 HR TF how many periods can we use ?

    Thank and regards, Juan

    PS. Sorry I do not know your name.