Market Commentary 15/02/16

EUR/USD – Dropping Into Daily Demand

Today we have seen the market break the swing low marked out in Fridays post, the market has now entered the demand zone seen on the daily chart.

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It would be risky placing short trades whilst the market is in this demand zone, there’s a strong possibility the market will bounce from this zone and continue its current uptrend, I would watch the support level within the zone for price action signals, this support is taken from the daily chart and has significant history behind it, a price action signal around the support level is likely to be a good trade just make sure you place the stop below the low of the zone, if the zone is going to provide a bounce the market cannot break this low.

 

USD/JPY – Definitely In Pull-Back Mode

 

The up-move created by the bottom demand zone has continued today, which means the market is in a pullback phase rather than a consolidation phase.

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We didn’t see a move down into the other demand zone created back on Friday, which was annoying as it wold have likely resulted in successful trade.


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As far as predicting when the pull-back is going to end I would wait for signs that the market is going to fall, I reckon it will be tough to pick a definitive level where the market is going to stop and resume the downtrend, the resistance level marked in the image is a place where I expect the to see some downside although personally I’m going to wait for an engulfing candle on the daily chart before tying to go short.

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Tomorrow I would watch for opportunities to get long on the 1 hour chart, we are not far away from resistance but that does not mean we shouldn’t take a trade if one presents itself, the support level in the image seems like a place where the market has the potential to turn if a small retracement occurs later tonight or early tomorrow morning.

 

AUD/USD – Finally Breaking To The Upside

We have finally seen some up movement on AUD/USD.

After consolidating for the majority of last week, today was the first definite indication of the market wanting to move higher, we have a new swing high, and today’s candle is looking rather bullish on the daily chart.

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If you are still holding the bullish pin bar trade I suggested last Tuesday I think now would be a good time to move your stop to break even, the market has to breach the support level on the image in order to begin moving lower, whilst its possible this could happen, I think for now you’ll be safe.

Its likely the pause we are seeing at the moment is due to the pro traders taking profits off their trades, had these traders placed their buy trades back at the lows of the two bullish pin bars creating the wicks, by now they would be in 1700 pips profit, if you held an open trade with that much profit, you would want to secure some of those profits just in case the market begins to fall.


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The support level I’ve marked in the image is a place where I think the market will turn if it falls lower, this is mainly due to the history the level has with other swing highs and lows found previously in the market, if we see a bullish engulfing candle around this support tomorrow it could be the beginning of the next wave up.

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