Market Commentary 09/02/17

EUR/USD – Falling Back Towards Buy Zone

In the past couple of hours we have seen EUR/USD start to fall back towards the buy zone which caused the upswing to take place yesterday afternoon. The fact the upswing caused by the market entering the zone has not been very big, is a signal that the banks may not have used the zone to get more buy trades placed into the market  Meaning if we see the market fall back into the buy zone later on tonight or tomorrow, it could end up being broken or it may only cause a small reaction to occur which would come to an end soon after starting.

If we see the market fall through the buy zone I suggest watching for entries short in the demand zone I’ve drawn from yesterday’s and today’s highs, as these highs represent the most recent points in the market where the bank traders might have got short trades placed, albeit smaller ones than what they’ve got placed at the highs marked by the blue supply zone inside the daily supply zone. If the market falls into the zone and causes another move higher to take place, similar to the one we saw yesterday, don’t go short at the supply zone and instead wait for tomorrows market commentary to come out before deciding what to do.

 

USD/JPY – Sharp Move Higher After Failing To Break To New Lows

When yesterday’s market commentary was published we had just seen the market fall right down to the current low which had been made on the 6th February. This drop towards the low seemed like it was going to continue but a couple of hours after my market commentary had been released, the market moved up and the low remained in-tact. Today this move has continued and the current price action is suggesting that we may be seeing the beginning of a reversal out of the daily demand zone take place.

You can see from the image that in the past two hours the market has risen quite a large distance away from the current low it almost broke through yesterday evening. If this current momentum continues I think we may see the market move into the sell zone later on tonight or in the early hours of tomorrow morning. If that happens, I don’t suggest you look for entries short in the sell zone because at the moment this upside momentum is looking too strong for the sell zone to hold, I think we will see the zone cause a small move to the downside, but not one that will push the market all the back to the demand zone which has formed at the bottom of this move higher.

 

AUD/USD – Falling From Daily Supply Zone

The move higher which began yesterday after the market had made a new lower low on Tuesday came to an end last night, and now the market is really close to falling and breaking through the low again.

You can see from the image how the market almost managed to make a new low early this morning, the only reason it didn’t is because of a sharp move higher which took place around the time the London trading session began. If we do see the low get broken and the market falls down into the daily buy zone in a sharp fashion i.e with multiple bearish large range candles, then it could be a sign we are seeing the market reverse, but we’ll have to see how the market reacts to the daily buy zone to confirm further whether this is the case or not.

For now just wait to see if the market drops down through the current low towards the daily buy zone or moves up into the daily supply zone and breaks through the current high.

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