Market Commentary 05/09/16

EUR/USD – Falling Towards Lows

EUR/USD has dropped further towards the lows today with a small retracement taking place shortly before the drop.

Aviary Photo_131175592257404265We can see the retracement began when the market opened last night and ended when the London trading session began this morning. I was hoping for the market to move up into the supply zone that formed last week but the retracement ended before it could be reached. Despite this the supply zone is still the nearest level we have to look for entries short, the drop today which caused the retracement to end could also be considered to be a supply zone but for me I would want to see a bigger drop take place before counting it as a supply zone so for now the focus is still on the upper supply zone.

USD/JPY – Profit Taking Entering The Market ?

USD/JPY has fallen from the new high it made last Friday and is now getting close to the low made by the NFP being released.

Aviary Photo_131175598753342040

I think this fall is far more likely to be from the bank traders taking profits off their buy trades than it is them placing sell trades to make the market reverse. This may all change depending on what price action forms over the coming day’s but for the moment it does seem like this drop is caused by profit taking.

The area which I’ve marked around the low is the place you want to be looking for entries long, this area encompasses the point where the banks placed their long trades when the NFP was released and the three other swing lows where they might have placed buy trades so it’s my belief that if the market is to fall into this area we will see the bank traders enter the market again and place more buy trades so make sure to watch for any bullish engulfing candles that form inside the zone if the market enters.

AUD/USD – Market Currently Falling Out Of Supply Zone

Last night the market rose into the supply zone which formed due to the NFP being released last week and is now falling out of the zone.

Aviary Photo_131175615327143882We haven’t seen a large drop out of the zone just yet which leads me to believe we are going to see another small move higher take place before the price completely reverses. If a move higher does take place I don’t think the high of the supply zone will be broken but it’s likely the high of this current fall will be broken as the banks will probably run the buy stops placed by the traders who went short during the move lower.

 

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