Market Commentary 14/03/16

EUR/USD – Approaching 1 Hour Demand

EUR/USD has dropped lower, it’s now inside the demand zone which was the source of the most recent move up.

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It looks as though the market has begun to react to the zone in the form of two bearish pin bars. Both of these pins were created by the market failing to move higher out the zone, we will have to wait and see what happens when the market drops further into the zone, a long trade could still be setting up if a bullish engulfing appears inside the zone.

I’m still of the belief the down-move we are currently seeing is a pullback before another leg up in this uptrend, if the market manages to break the low I’ve marked on the image then I would expect the market to continue falling to the demand zone which formed when the ECB conference was taking place.

If we don’t see a break of the lows then wait for a break of the high marked in the image before going long.

If the marked falls into the lower demand zone watch for a bullish engulfing candle before going long.

 

USD/JPY – Moving Lower From 1 Hour Supply

 

The supply zone the market and just entered last Friday was broken last night and the market is currently moving lower from the other supply zone found just above it.

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When the market opened it gapped higher, this is what broke the zone initially, it then fell before breaking higher into the upper zone. The market has fallen slightly since then and the low I’ve marked in the image is now in danger of being broken.

If the low ends up being broken it would signal further downside movement, for entries short we need to wait until the market creates new structure, a quick down-move may create a supply zone we can use to look for a possible sell trade.

 

AUD/USD – Bearish Pin Bar On Daily Chart

 

AUD/USD begun dropping lower last night, this drop has created a somewhat deformed bearish pin bar on the daily chart.

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I would withhold trading this pin, the reason why is due to the close proximity of the market to the daily demand zone. It could be possible the demand zone will fuel the next move up in the trend, if it does then the profit potential of this pin bar isn’t very high at all.

I still think an opportunity to go short could be had from the 1 hour supply zone created earlier today although its important to keep take profit levels low as we don’t know how far the market may move into the demand before bouncing back higher.

For now the bias stays short, when the marked hits the demand zone watch for a break above the most recent highs before trying to get an entry long.

 

 

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