Market Commentary 15/03/16

EUR/USD – Consolidating At The Lows

 

The swing low we looked at yesterday has been broken, the market is now beginning to consolidate around the low.

Aviary Photo_131025395767020341

The demand zone also ended up failing. The market fell slightly past the zone and broke the low, from here the market moved up slightly and was looking like a new up-move was about to break the swing highs. Another move lower then took place, this made a new lower low which was counteracted by a move up which made a new high.

Usually when the markets starts consolidating like this stops begin building up just below the lows, looking at the open orders graph shows us this is already happening.

Aviary Photo_131025396420677084

On the graph we can see how there is a large percentage of buy orders around the 1.1060 level, these are not stops, these are either take profit orders from traders who have been in profitable long trades (which is unlikely) or pending orders to buy when the market falls. On the other side of the graph we can see the sell stop orders. Currently these constitute to just over 0.5% of all traders using oanda, for a stop run to occur I would think we need to see a more substantial build up of stops.

Tomorrow we need to watch for a larger amount of sell stops to be placed below the low, at the moment there isn’t enough there for me to consider trading a stop run.

 

USD/JPY – Market Falling After Spiking Supply

The supply zone which was spiked by the market yesterday was hit again today and is currently pushing the market down.

Aviary Photo_131025399090772999

Whilst the market only manged to penetrate the outer edge of the zone yesterday, today the market drove deep into the zone before reversing.

Looking at the daily cart we can see the movement over the past couple of weeks is starting to form a consolidation. This means taking short trades could be risky as the market is near the lower boundary of the consolidation.

For entries long I would keep an eye on the area I’ve marked with a rectangle in the image.

I haven’t marked this area because it’s a demand zone I’ve marked it because it marks the place where all the swings up in the consolidation have formed from. If the market drops back into the area its likely the traders who brought creating the previous swings up will buy again, therefore if we see a bullish engulfing candle in here on the 1 hour chart it could be a decent entry long.

 

AUD/USD – Inside Daily Demand

The marked has dropped further into the daily demand zone located yesterday.

Aviary Photo_131025400317206283

We have begun to see some signs of buyers coming into the market in the form of bullish and bearish pin bars although we have yet to see the market make any king of significant move higher. I think we may see another small drop lower before the market starts giving us signals to go long, the highs marked in the image need to be broken before looking for an opportunity to get long

2 Comments

  1. Joachim Werner
    • ForexMentorOnline

Reply

Get My FREE 6461 Word Book On Supply And Demand Trading

Lear to trade the same way the pros do!
No Thanks, I prefer to Lose Pips :(
close-link

Want Free Forex Trading Signals?

Get Supply & Demand Trade Levels Weekly Into Your Inbox!

Plusss...
  • My 6461 Word Book On Supply And Demand Trading 
  • How Old Supply And Demand Zones Do Not Cause The Market To Reverse And The Reason Why Traders Mistakenly Believe They Do
  • Why The Time It Takes For The Market To Return To A Supply Or Demand Zone Will Determine Weather The Zone Has A High Chance Of Causing A Reversal To Take Place
  • The Differences Between Zones Created By Bank Traders Taking Profits And Zones Created by The Bank Traders Placing Trades
Get Free Access Now!
close-link
New Book: "How To Determine When A Reversal Is Going To Take Place"