Market Commentary 11/08/16

EUR/USD – Advancing Higher After Down-Move

EUR/USD is making it’s way higher again after falling lower in the early hours of this morning.

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The drop started around 12:00am last night, to begin with the drop seemed like it was only going to be small but when the London session began a much bigger fall took place. This pushed the market below the swing low found at the beginning of the last move up, although this does technically signal a lower low in the market I think it’s to early to say for sure the market has reversed and is now going to begin falling lower.

I would concentrate on whether the market can break through the current high as this high and the high seen to the immediate left of it, have either been created by the bank traders taking profits off long trades or placing sell trades because they are expecting a bigger move lower to take place.

If the market breaks past the high by more than 35pips I would assume it has been created because of the bank traders taking profits off long trades and a move up to the 1.1233 high would now be expected.


USD/JPY – Multiple Swings Forming Close To Demand Zone

Yesterday we saw the market fall into the demand zone that had formed from the bank traders placing buy trades back on the 5th August

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Since hitting the demand zone the market has managed to produce several swing lows which are all found at prices that are close together. This suggests the banks are getting buy trades placed in anticipation of an impending move higher, we can’t confirm this to be fact just yet but it there is a strong possibility that this is what we are seeing take place.

In order for us to get a long trade placed and make some pips from the move higher we need more price action to form in the market, a big move higher consisting of multiple bullish large range candles would create a demand zone we can use to get a long trade placed if another drop occurs. This is highly likely due to the fact the banks are usually unable to get all of their trades placed before the market completely reverses.  This means they must make the market move back into the price range where their other trades have been placed before the main movement from the reversal develops.


AUD/USD – Possible Reversal In Progress

Yesterday the market had broken above the highs we suspected had formed because of the bank traders placing sell trades. This break negated our belief the banks had placed sell trades at the highs because if they did they would not want the market to move past them by a large distance.

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Today there have been two drops which may or may not have been created because of the bank traders placing sell trades to make the market reverse. If these two highs have formed due to the bank traders placing sell trades watch to see if the market is able to break a large distance past the highs as this would signal to us that they have actually formed due to profit taking like we saw with the highs earlier on in the week.

Also you want to watch for a break below the current low as this would signal more downside at least until the buy zone at 0.7666 is reached.