Market Commentary 11/07/16

EUR/USD – Swing Low Still Not Broken

The swing low which was made when the NFP was released last week has still not been broken and for the moment it seems difficult to determine which way the market is likely to move.

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On the one hand it could be that the swing high of the NFP release formed because of the banks placing sell trades and that the swing low formed due to them taking some profit off these sell trades. On the other hand the swing low could have formed because of the bank traders placing buy trades, this would mean the market is likely to start moving up this week and we’ll not see the swing low broken.

I think the best idea is to wait until one of the swings has been broken before deciding whether to go long or short, the demand zone is a point you need to be watching for price action signals due to it’s proximity to the swing low that might have formed because of the bank traders placing buy trades. If they have placed buy trades here they will not want the market to break the below the low which means it’s likely for them to come into the market and push the price up when it’s getting close to the swing low.

USD/JPY – Climbing Higher After News

10 hours ago Japans PM has come out and said he has ordered a new economic stimulus package to go in to effect on July 12th. This news has caused the price of USD/JPY to increase and we have yet to see any kind of retracement take place which we can use to get a potential entry long.

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It’s funny how  a stop run took place right before this move higher began. You might remember the stop run occurred last friday and now today we are seeing the price make a big move higher. It’s almost like the banks knew what the news was going to be before it was released and placed their trades accordingly.  The supply zone which formed at the top of the move lower is a place where I think we’ll see the market either retrace or reverse as it’s the last place where the banks placed a lot of sell trades into the market.

A break above here would tell us a move up towards the highs made before Britain announced it’s exit from the EU is possible as that is the next location where we know the banks placed sell trades into the market.

AUD/USD – Falling After Hitting Supply Zone

The price of AUD/USD has begun to decline after hitting a supply zone which formed earlier today.

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I don’t think we are seeing the market fully reverse here, I reckon this is just a retracement before the next move higher takes place. If the price does in fact continue to drop watch the important low for signs of a move back up as this is last place where the banks placed buy trades into the market, they wont want the price to drop below these lows otherwise their buy trades could start losing money.

 

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