Market Commentary 10/04/17

EUR/USD – Almost Inside Daily Demand Zone

The market did not close back into the range of the spike which occurred last Friday. Instead it broke through the lows and continued to fall until the market closed later on that night. The fact that it’s fallen even more suggests we are probably going to see a move into the daily demand zone taken place sometime this week.

This daily demand zone is quite an important zone due to the number of sell orders that were entering the market at the time of it’s formation. If the bank traders have caused the market to fall back to the zone as a means of getting more buy trades placed, we’ll start to see multiple swings form with their lows at similar prices to one another when the market enters the zone. For now I think you should continue watching the supply zone closest to the current market price for entires short, as this is the most recent point where the bank traders have placed sell trades, if they want to keep these trades open they’ll sell again when the market enters the zone.

 

USD/JPY – Small Retracement Near Supply Zone

Today we have seen the market retrace slightly after moving up towards the supply zone at the end of last week. The move up began right after the market had spiked into the demand zone. I said in Friday’s market commentary how a sharp move higher would suggest we’d see more upside take place this week, and so far it’s looking like that will be the case.

I’m not sure if the move up will cause the market to break through the supply zone, but I definitively think we’ll see some kind of reaction take place at the zone when the market moves into it. For now I think it’s a good idea to watch for signs of a reversal taking place at the supply zone. If we do see a reversal out of the zone take place, it’s likely the market will drop back into the demand zone which caused the swing high to occur, if only a retracement out of the zone is caused, it should still be enough to escape with a profit or small loss.

 

AUD/USD – Daily Demand Zone Broken

The daily demand zone which the market had begun reacting to at the end of last week has been broken today, but even though it’s been broken there’s still a chance we could see a reversal or retracement out of the zone take place, so long as a sharp move higher occurs over the next few hours.

You can see that the market has started to move back into the zone this afternoon, so far it hasn’t managed to penetrate too far back into it, but this could change if we see a move up occur over the next few hours. As far as entries are concerned I’d suggest that you watch the supply zone closest to the current market price for entries short. This zone is the most recent point where the bank traders have got a large portion of their sell trades placed, if they want these trades to remain open regardless of whether a reversal out of the daily demand zone takes place, they have to sell upon the market returning to the zone.

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