Market Commentary 11/05/16

EUR/USD – Retracement Potentially Over

In my last post I said how it may be that the upmove we were seeing is the end of the downside retracement and the market may be getting ready to continue in the direction of the uptrend. Today we have confirmation that this is the case with a large up-move taking place which has broken the previous high.

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I did say to watch for a deep pullback to take place if the price managed to close above the blue line, although the price didn’t manage to break past the blue line we ended up getting a deep pullback anyway. From here the market began to rise but it wasn’t until the bullish large range candle seen an hour ago that we had decent confirmation the price wanted to move higher.

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The high which I’ve drawn the Fibonacci retracement from is a breakout zone you can use to look for an entry long, the big bull moves means the banks buy trades are likely to be in a lot of profit by now so it probable they will want to secure some of those profits before pushing the market higher again. This profit taking could cause the market to fall in to the breakout zone and give a signal to go long, so make sure you keep an eye on the price action once the market drops into the zone.

USD/JPY – Downtrend Back In Play

USD/JPY has fallen today and its looking more and more likely this is the end of the retracement we have been in for the past 7 days, the dowmove seen today hasn’t pushed the price far enough for the daily candle to be a bearish engulfing so it may be possible we’ll see another small retracement tomorrow before the price declines a large amount.

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The demand zone didn’t provide us with another move higher and the market broke it easily before moving lower, if we do see a retracement higher I think the area I’ve marked with a green box could be the best place to look for entries short as it’s the most recent point where we know banks have placed sell trades.

If they want to place more sell trades to take advantage of the downtrend continuing then they need to make the price come back up into this zone, if you see the market enter this zone tomorrow or tonight watch for a bearish engulfing candle before going short, we need confirmation the banks are placing more sell trades this will come in the form of a large bearish engulfing candle.

 

AUD/USD – Price May Be About To Break The Upper Boundary Of The Consolidation

The market touched the upper boundary last night which caused a new high to be made, after a small decline the price is back by the upper boundary now and we may see a breakout over the next few hours.

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If the price manages to close past the upper boundary it would signal to us a bigger retracement is taking place and its now okay to take long trades. For entries long I would wait until we see a close past the new high which was made the first time the market touched the upper boundary.

A close past here would mean the high could be used as a breakout zone and a opportunity to get long may present itself.

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