Market Commentary 11/10/16

iEUR/USD – Fallen Into Daily Demand Zone

Today EUR/USD has fallen into the daily demand zone which formed back on the 5th August, I do think we are going to see some kind of move higher originate from this daily demand but so far no signs of a reversal have appeared in the market.

aviary-photo_131206703161299780I think if a move up does begin from this demand it will terminate somewhere inside the supply zone closest to the current market price. Although the banks did not place as many sell trades here as they did when the supply zone at the top of the move down was created, I still think this is a better place to look for entries short because I don’t believe we are going to see a big move higher take place from this daily demand zone.

Ultimately I think the market wants to move into the daily buy zone seen just below the 1.10000 level, the reason I say this is  because the buy zone marks the point where the banks either came into the market and took a really large amount of profits off their sell trades or placed a really large number of buy trades into the market, at the moment it’s not possible to tell which one it is but in any case when the market comes back to this zone the banks are probably going to take more profits or place more buy trades so a big move higher is likely to take place.

Tonight watch for a move out of the daily demand zone, if no move higher occurs and instead the market breaks the zone and continues falling await more price action before going long or short.

USD/JPY – Falling Out Of Daily Supply

Just this past hour we have seen USD/JPY fall out of the daily supply zone it was moving back into yesterday night. Although I did say if we saw a move out of the zone it’s likely a reversal is taking place I’m still hesitant to consider what we’re seeing now as a full-blown reversal.

aviary-photo_131206711147617299Really the question now is can the market break through the demand zone which caused the last move up to take place ? If it can break through the zone it’s likely a reversal is actually taking place but if it can’t then it’s a signal that we may not be seeing the market reverse and that we might be just seeing a consolidation develop from the banks taking profits off long trades placed earlier on in the move up.

For now just monitor the situation and see how things develop over tonight, I wouldn’t recommend going long or short based on the current price action so it best to wait to see what’s happened by tomorrow morning .

AUD/USD – Large Move Lower From Sell Zone

It turned out the second spike into the supply zone did cause the market to fall lower again which means the supply zone now becomes a sell zone.

aviary-photo_131206718991573533 The drop created by the second spike did cause the market to break through the demand zone which I thought would cause a reaction upon being reached. Now the market is sitting inside the demand zone which caused the second spike into the supply zone to take place. I’m not sure if we’ll see a small move higher occur from this demand or if we’ll see the market break through the zone and continue falling. If we do see a move higher, watch for it to end somewhere inside the sell zone as this is the most recent place where the banks got sell trades placed into the market. If the market falls through the demand zone mark the point where the drop began from as supply and watch for entries short.

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2 comments

  1. Cristian

    Sell Zone is a Supply Zone that was touched before. Since the zone managed to reverse the price it seems that banks have sell orders in the area and they are selling again when the price comes at the respective level.
    A supply zone was is fresh, you don’t know if the selling there was new orders or profit taking from long orders.

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