Market Commentary 17/03/16

EUR/USD – New High, Demand Formed On 1 Hour Chart

 

Yesterday’s momentum continued throughout today the market has made a new higher high and we have seen a demand zone form at the bottom of the up-move.

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We are beginning to see a little bit of selling enter the market. It’s likely this is from pro traders taking some profits off their buy positions. Before the market makes another move up past the daily swing high found at the 1.13755  level. If the market breaks this high it will enter the upper part of the overall consolidation the market has been in since the downtrend ended back in March last year.

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It’s really important we watch the market closely when it reaches this area because if the upper boundary holds,the market has a high chance of falling back to the lows of the lower boundary or the demand zone which is 250 pips away.

Tomorrow keep tabs on the demand zone marked in the first image. A return back to this point could give us an entry long that we can hold until the market reaches the upper boundary of the consolidation.

 

USD/JPY – Significant Move Lower, Lows of the Consolidation Broken

 


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The consolidation USD/JPY has been in the past 23 days has been broken by today’s move lower, it’s now looking likely that the market will continue the downtrend.

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Currently the market is moving up because of the large bullish engulfing candle which formed when the market broke the consolidation lows. When the market was falling earlier today it created a supply zone which was almost spiked when the market made a sudden pullback. If we see a move up back to this supply we could get a short trade placed, remember to watch for bearish engulfing candle form inside the zone, if a bearish pin bar forms then make sure you wait for the candlestick immediately after to validate the pin.

 

AUD/USD – Up – Trend Back Underway

 

AUD/USD has made another large move higher today after bouncing from the daily demand zone yesterday.

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After a slight pull-back last night from traders taking profits the market made a big advance past the previous swing high. A little more profit taking then came into the market which created a demand zone on the 1 hour chart. The market dropped into this demand earlier today and has now just broken past the swing high created on the down-move.

The focus now is on whether the move up is able to continue or if a more substantial pullback is going to take place.

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Looking at the daily chart we can see the market is a short distance away from the consolidation which caused the last move lower. I would expect some selling to enter the market due to this consolidation, that may be enough to push the market down to the support level marked above.

When it comes to looking for long trades the 0.75900 support level is the nearest level in the market which may cause a reversal and put a stop to a pullback from the current move higher. If you see the market drop back to this level and produce an engulfing candle dont hesitate to get long.


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