Market Commentary 14/07/16

EUR/USD – New High After Sudden Move Higher

The market has managed to make a new high this afternoon due to the appearance of a large bullish candle.

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We can see how the market did end up reversing at the little pause which I mentioned yesterday. I didn’t mark this as a demand zone because I don’t tend to trade these types of zone but a successful trade could be had if you had taken a trade at the zone. The big bullish candle has pushed the market into an area where lots of highs have formed previously, these high might have formed due to the bank traders placing sell trades.

If this is the case the bearish candle seen after the large bullish candle is a signal that the banks may be placing more sell trades. For this to be confirmed we’ll need to see the market break below the low in the image. The low is the most recent point where the banks placed buy trades into the market, a break past here would signal that they are no longer interested in making the market move higher and it’s likely we’ll see the price drop down towards the low of the whole move up found below the bottom demand zone.

 

USD/JPY – More Profit Taking Entering The Market

Today we have seen the market move up again and in the process make a new high, the price is now falling due to what is likely to be the banks taking profits off long trades.

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We can see how yesterday’s profit taking ended with the market making a large move higher which began early this morning. This run higher has created a demand zone which we can use to look for long trades should the current drop cause the market to fall back into it.

The low which is found under the demand zone is important because it represents the last known point where the banks entered a large number of buy trades. A break below here would suggest the banks have closed their buy trades and the market is now reversing. For now just watch to see if the market breaks the new high or drops into the demand zone, if it drops into the demand wait for a bullish engulfing candle to form before going long.

 

AUD/USD – Approaching Current High

After bouncing from the demand zone yesterday it seem as though AUD/USD was set to break the high of the current move down. Instead the market fell back towards the demand zone before moving higher again

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You can see how the price fell back towards the zone soon after the up-move took place. Since then the market has kind of consolidated higher. Up-moves have been followed by down-moves and we are at a point now where the next up-move may be able to break through the current high.

If the high ends up being broken it means we’ll probably see more upside movement tomorrow and next week. If the price starts to fall wait for a break below the demand zone before trying to get short trades placed.

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