Market Commentary 13/07/16

EUR/USD – Approaching Yesterdays High After Hitting 1 Hour Demand Zone

The market continued to fall after breaking the NFP high yesterday but has since recovered due the 1 hour demand zone being hit.

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Whilst the price had been moving up this morning it’s only in the last hour that we have seen the market make a really big move higher. The whole up-move started when the price fell into the demand zone at the open of the London trading session this morning. The London bank traders placed buy trades which is what caused the first part of this move up, they then took a little bit of profit off their buy trades at the open of the NY trading session to enable the intra-day NY bank traders to get their own buy trades placed, this is bearish engulfing candle you can see in the move up.

All we need to see now is the high get broken. At it stands there isn’t any levels we can use for a possible entry long, the two bearish candles that formed during today’s move higher do form a demand zone but I’m hesitant to use it to get any trades placed due to the fact it has formed during the move up as opposed to forming at the point where the market changed direction.

For now I think it’s best to just wait and see what price action forms when the swing high breaks.

 

USD/JPY – Profit Taking Beginning To Enter The Market

After a continued run higher over the past few days we have finally seen some profit taking enter the market.

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The profit taking began last night just before the close of the NY trading session, a move higher this morning could have fooled people into placing more long trades in anticipation of a break higher although this was not to be as more profit taking came into the market and pushed the price back down.

I don’t think the move higher is finished just yet, I think this profit taking will come to an end and we’ll see another leg higher maybe by the end of the week, for now keep an eye out for signs of a move higher, a break below the swing low would signal further down-movement but be aware it’s likely to be limited.

 

AUD/USD – Demand Zone Causes Move Higher

The 1 hour demand zone which I marked out in my last post has caused the market to move higher today.

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You can see how the demand zone was spiked early this morning around the time of the open of the London trading session. Once the market had dropped into the zone it proceeded to rise out of it in a relatively strong fashion, now over the past couple of hours we have seen some more selling enter the market in the form of a bearish engulfing candle. This might just be from the banks taking more profits off their trades but there exists the possibility that this could be caused by the banks actually placing sell trades to cause a reversal to take place.

While I think this is rather unlikely it is still a possibility that needs to be taken into account. Your best bet for the moment is to see if the market is able to break above the swing high or if it begins to fall back down to the demand zone where the  up-move originated from.

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