Market Commentary 09/01/17

EUR/USD – Falling From Sell Zone

EUR/USD has today fallen out of a sell zone which formed back on the 15th December. The market did actually spike this sell zone last week, but the resulting move lower soon came to an end once the market reached the swing lows created by the move up seen before the spike. The question now is whether the market is going to continue falling, or if it’s going move up again and either break through the sell zone and move into the supply zone above or spike back into the sell zone before falling again.

Looking at the image you can see over the past couple of hours the market has begun to rise. If this move up continues, it could cause the market to break through the sell zone and move into the supply zone above found between the 1.07149 – 1.08716 levels. If this happens and we see the market break above the high marked with a red line on the image, the point where the move up has originated from will become a demand zone which we can use to look for entries into long trades. If this move up fails and we see the market fall back down to the buy zone without breaking the sell zone, the demand zone I’ve marked will become a supply zone which we can monitor for short entries provided the market ends up breaking through the buy zone seen at the bottom of the image.

For now I’d just wait for more price action to form before looking for entries long or short. With the price action being the way it is now, I’m not sure if we’ll see the market break through the buy zone without first breaking the sell zone or if we’ll just see the price continue to fall from where it is now until it has broken through the buy zone.

 

USD/JPY – Falling Back Towards Buy Zone

At the end of last week USD/JPY had stated to rise up out of the buy zone it had fallen into during the middle of the week. Today the market has started to drop back towards this buy zone and it’s possible we could actually see the market fall into the buy zone again before another move higher takes place.

This past hour we have seen a bullish pin bar form. This bullish pin could mark the beginning of the move up which breaks above the high of today’s drop or it could be a sign some profit taking is going to enter the market and we’re going to see a small retracement take place. I’m not sure which it’s going to be just yet, but I think that if the market moves up and breaks through the high of today’s drop, we’ll probably see the highs of the sell zone broken a short time later. If the move up turns out to be a retracement, a drop back into the buy zone is likely to occur, and I think It’d be a good idea to watch for entries long because this buy zone is one of the most recent places the banks got a large number of their buy trades placed into the market.

 

AUD/USD – Swing Highs Almost Broken

After suffering a bit of drop at the end of last week, AUD/USD has today started to rise again and is now close to breaking past last weeks high.

Today’s rise began when the market entered a demand zone that had formed last week. This demand marked the most recent point in the market where the bank traders could have got a decent amount of their buy trades placed. If they wanted to keep these buy trades open they’d come into the market and buy again which is what I think they’ve done to cause today’s move higher to take place. If the market is able to break through last weeks high, I think we’ll see more up-movement take place over the next couple of days. The most likely place for this up-move to come to an end is the daily supply zone which formed from the large drop which occurred on the 14th of December.

Until the market reaches this  zone or shows signs of reversing, the aim is to get buy trades placed. Today’s demand zone is a point where I think you should continue watching for entries long because it’s still possible we’ll see the market fall back into this demand before moving up towards the daily supply zone.