Market Commentary 14/12/16

EUR/USD – Consolidating Before Interest Rate

The move into the sell and supply zone I expected to occur today has not taken place and instead the market has spent most of the day consolidating between yesterday’s high and low.

We may still see a move up into the sell zone /supply zone take place. Sometimes during big events like these the market will start moving in the opposite direction to which the announcement is going to push the market a couple of hours before the announcement comes out. The interest rate announcement along with the FOMC conference begins at 7:00pm GMT so we might see the market begin to push up into the sell zone around 5:00pm GMT.

For now it’s best to wait to see what the market does over the next few hours. I can’t really recommend going short because I’m wary of a spike higher taking place when the news comes out. If we were to sell now and see the market start to move into the sell zone, a spike when the announcement is made could cause our stop loss to be hit, whereas if we wait to see if the market moves up over the next couple of hours we might have a chance to get a better entry.

 

USD/JPY – Falling Towards Yesterday’s Low

In yesterday’ post I said how it was my belief we’ll see the market drop towards the demand zone so the bank traders could get more buy trades placed ready for when the interest rate announcement comes out. Today we have seen the market drop, but only down to yesterday’s low.

Similar to EUR/USD I think we could see the market begin dropping through the low closer to when the interest rate is announced. There are some sell stops just above the 115.000 level which would get hit if the market does drop or spike through the low so maybe that’s what we’ll see take place when the news the comes out at 7:00pm.

For entries long I’d keep an eye on the demand zone below the current market price. I know getting an entry during news is very difficult especially with all the hype and expectation surrounding today’s events but I feel like when the interest rate is announced we’ll see the market spike through yesterday’s low and into the demand zone seen below before turning and moving higher.

 

AUD/USD – New Higher High

Contrary to what I said in yesterday’s post, today we have actually seen the market move up again and an hour the market was able to break above yesterday’s high.

We did see the market continue moving lower after the bearish engulfing candle formed yesterday evening, but this move didn’t last long and the market was unable to break through yesterday’s low, which was a hint we might see a small move higher take place during the night. Since the high was broken 45 minutes ago we’ve seen the market fall slightly. The candle for this hour could end up being a bearish engulf which means we may see the market fall over the next few hours before the interest rate announcement is made.

I’d stay out the market for now, just wait until the interest rate announcement has been made before looking for entries short.

 

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