Market Commentary 12/05/16

EUR/USD – Deep Pullback On The 1 Hour Chart

With yesterdays move higher it looked as though EUR/USD was set to continue the momentum throughout today but instead the price has fallen back towards the lows.

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The breakout zone didn’t end up pushing the price higher, it caused a slight pause the market fell abruptly soon after. Buying came into the market in the region where we identify a deep pullback taking place i.e between the 70% and 90% retracements levels. This buying has created a demand zone which may provide us with an entry long as I don’t believe this current drop will continue the downside retracement the market has been in for the past 9 days.

Tomorrow look for an entry long in the demand zone, if a clear bullish engulfing candle forms then we might have decent entry on our hands.

USD/JPY – Down-move After Retesting Highs

There was nice short entry you could have had today if you watched the area I mentioned in my last post.

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I said to keep an eye out for a bearish engulfing when the price enters the zone, sure enough at 1:00pm the price entered the zone and the market began to fall. From 1:00pm to 1:30pm it looked at though the price may continue to move higher, I was watching the price action on the 5 minute chart and there wasn’t any signs that a drop may be about to occur.

This all changed at 1:30pm when the unemployment claims news was released, when the news came out there was an immediate drop which was followed by a small retracement. Since then the price has continued to fall, but I think we may see a small move higher over night from the banks taking profits.

For now just monitor the market to see what the price does, our aim if your entered into this trade is to get more trades placed in the direction of the downmove, we need more structure to form in order to this so we must wait to see how the price action develops overnight.

 

AUD/USD – Back Into The Consolidation

When I released yesterdays post the market has just moved outside the upper boundary of the consolidation and I thought we would see another move higher over the course of the night.

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You can see how the price only managed to move a small distance outside the upper range boundary before dropping lower the rest of lats night. A small retracement this afternoon has now lead to another drop, if this drop comes to the lower boundary it might give us a signal to go long. If it does wait for the low where I’ve placed the arrow to be broken as there is a high chance there is a lot of sell stops down here from traders who have been buying on the retracement higher.

If the banks wish to get more buy trades placed they’ll make sure these are hit as it will allow them to get a large number of positions placed at the same price.

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