Market Commentary 08/04/16

EUR/USD – Market Moving Into Supply Zone Created By False Break


Another drop into the lower boundary failed early this morning and the market has risen back up to the upper boundary where it is currently trying to break higher.

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When the market made its first move up from the lower boundary a demand zone was created which you could have used to get into a long position. The return to this demand formed a bullish pin bar which would have been okay to use for an entry due to its proximity to the lower boundary of the consolidation.

Another entry could be found on the 5 minute chart.

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The bullish engulf came immediately after a large drop lower in which many traders on the 5 minute and 1 minute charts would have sold short. When the bullish engulf formed and the market began moving up these traders would be liquidating their losing trades which would have contributed a great deal to the move higher itself.

As it stands the market is very close to the supply zone which formed when the market made a false breakout, I still believe this supply zone could present us with a good short trade if we see a bearish engulf form inside the zone, whether this will happen by the end of today or when the market opens on Sunday night remains to be seen.


USD/JPY – Pullback Higher, Possible Move Lower Into Weekly Demand


We have seen a pullback take place on USD/JPY right before the market hit the weekly demand zone.

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I think this pullback will end up making a lower low and we will see a drop into the weekly demand, then again it is possible we could see a deep pullback take place and the market will not make a new lower low although the odds of this happening are low as the move up creating the pullback does not seem to be too strong.

For now see where the market ends at today’s close, if a new low is made its probable we’ll see a drop into the weekly demand come Sunday evening, if a new low doesn’t form then we must wait until Sunday night to see how the price action develops.


AUD/USD – Stop Run On 1 Hour Chart


After the dramatic fall AUD/USD suffered yesterday a small rebound has taken place today.

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I’m not sure if today’s move higher is from banks placing buy trades or taking profits on sell trades, from the way things currently look I would lean-to the latter and say its profit taking but I could be wrong.

The past hour has seen a stop run on the recent swing high, the banks may have done this to place more sell trades into the market the only way to know is if a move lower takes place over the rest of the day and the most recent swing low is broken, in the event that it is broken further downside should be seen come Monday.


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