Market Commentary 12/04/16

EUR/USD – Stop Run Above Consolidation Highs

After we saw a bearish engulf in the supply zone yesterday the move lower it created failed and a run higher began.

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As the market climbed higher buy stops started to accumulate in between the 1.1460 – 1.1475 levels. When the US session opened around 12pm GMT a big run higher occurred which hit the stops, the market fell and what we were left with was a large bearish pin bar.

The market has continued to fall since the pin and two old swing lows have been broken, it’s looking likely that this may be the end of the consolidation and over the course of the week the market may fall to lower levels. For trading opportunities I would concentrate on the breakout zone market in the image.


USD/JPY – End Of Down-Move ?


We didn’t end up seeing a stop run below the lows which I thought may take place today, instead the market turned at a small demand zone which cause the market to move up yesterday.

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The move higher today has caused a bullish engulfing candle to form on the daily chart, it could be that this engulf signals the end of the current down-move and what we are seeing now is the beginning of an overdue pullback. We can see the momentum right now is up as evidenced by new higher highs, ultimately we need to see the old swing high on the left of the chart broken in order to confirm the pullback is actually taking place otherwise what we are looking at could develop into a consolidation.

For entries long the demand zone which started the current swing up is the nearest level we should monitor for price action signals. If the market returns to this zone and produces a bullish engulfing candle it may give us a decent amount of pips if this does turn out to be the start of the eventual pullback higher.


AUD/USD – Continued Move Higher, Market Reacting To Recent Supply


AUD/USD has continued to make new highs but a sudden down-move throws doubt into whether the market can continue higher.

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A drop into the breakout zone didn’t end up taking place, the market missed the zone by 2-3 pips before continuing its advance higher before falling into the demand zone. Now another move up has taken place into a supply zone which formed from a drop earlier. The strength of the move into this zone leads me to believe it will be broken but on the other hand the supply falls inline with the consolidation which caused this entire down-move, this could mean the bank traders are selling again expecting the market to move lower.

If the supply zone is broken mark the highs it breaks as a breakout zone and watch for entries long, if the market falls from the supply keep an eye on the low of the demand zone just below, if these lows are broken it signals more downwards momentum and it could be the end of this whole move higher.