Market Commentary 11/04/16

EUR/USD – Bullish Move Back Into Supply Zone

Today has seen the market move back into the supply zone which the market first spiked at the end of last week.

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Two additional spikes into the zone occurred early this morning when the market opened. The second spike caused a move lower which eventually failed and over the past few hours we have seen the price advance higher back into the supply zone.

Currently we are seeing the market react to the supply zone with a possible bearish engulfing candle, if the candle stays a bearish engulfing by the end of the hour, then a possible entry short could be in play, the problem is the highs which I’ve marked with X’s could contain a number of breakout traders who went long as the market broke though the highs which means if the price declines into these highs a lot of these traders will exit their trades which has the potential to cause another up-move.

 

USD/JPY – New Lower Low, Stop Run On The 1 Hour Chart

 

USD/JPY has managed to make a new lower low today, but as it stands the market has not been able to close into the new low which suggests buy orders are coming into the market at a relativity similar price range.

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The market is still really close to the weekly demand zone we identified last week, a possible move into this zone could still take place so we must keep an eye on price action over the coming days.

There was a stop run which occurred a couple of hours ago at the 108.400 level…..

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On the open orders graph we can see how there was a build up of buy stops just below the 108.500 level, the candle which hit the stops was initially bullish, it was only after hitting the stops the candle turned into a bearish pin, therefore this pin bar is technically a stop run pin.

Tomorrow we need to look out for a stop run below the current low, if you look at the graph above you’ll notice there are a large number of sell stops building up around the 107.500 – 107.600 levels, if we see a spike into these stops it could be a good entry long as there is likely to be banks placing buy trades into the sell stops.

 

AUD/USD – Breakout From Small Consolidation

 

An upside breakout has pushed the market up to an old swing high, there is some signs of selling coming into the market but its likely this is from profit taking rather than traders placing sell trades.

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The consolidation developed when the market opened last night, the breakout came not long after the US session began which suggests the morning was used by the European traders to place buy trades.


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When the market broke out of the consolidation it left a couple of highs retail traders could have used to enter into breakout trades, I’ve marked these highs with a zone. If the market returns to this breakout zone watch for signals to get long, the market could turn either near the breakout highs or at the demand zone which I’ve incorporated into the breakout zone itself.

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