Market Commentary 18/03/16

EUR/USD – Profit Taking Causing Pullback

 

Some profit taking has begun to enter the market from the banks taking profits off long positions.

Aviary Photo_131028650422845495

Its interesting how the profit taking has entered the market right at the point where it reaches the upper boundary of the consolidation, maybe the banks are expecting a move lower to take place so their making sure to bank some of the profit they have made on their long trades.

If the profit taking continues the market may fall back to the demand zone marked in the image, we may see a setup long appear around here or we may see the market fall further back to the daily demand zone created when the FOMC news was released.

In either case watch for a break of a swing high and a engulfing candle before going long.

USD/JPY – Bullish Pin Bar On Daily Chart

 


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USD/JPY is still fluctuating around the lows which were made yesterday, today’s move has formed a bullish pin bar on the daily chart.

Aviary Photo_131028671069545072

I think we may get a small pullback up from this pin, the supply zone marked in the image is a likely place for the market to turn due to the confluence it has with the daily resistance level. At the moment I would be hesitant to trade this bullish pin, because of the small risk reward ratio it has, I dont believe the market has much further to go before dropping again.

For now just keep an eye on the supply level marked in the image, if you see the market run back up into here and produce a bearish engulfing candle take the entry short.

AUD/USD – New Higher High – More Profit Taking

 

Another new high has been made by the market but the short term momentum is now down due to the profit taking entering the market.

Aviary Photo_131028679623811676

Successive lower lows means the market is more likely to fall in the short term, the two places we need to be watching for trades is the demand zone which has already been hit yesterday, and the zone below it at the 0.75400 level.

The zone which has already been hit is important as it could provide support for the market if it manages to return, plus its near the big round number level of 0.76000 which could mean alot of stops or buy orders build up around the zone. The second demand zone which is 50 pips away from the current market price falls inline with the swing highs which were broken when the market made a large move up, a price action signal inside this zone could have a better chance of pushing the market higher than the first zone above it.


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On Monday just observe how the market moves, if it drops into the demand its in now and makes a move out of it breaking a swing high begin looking for places to get long, if it drops lower into the second demand zone then await a bullish engulfing signal to get long.

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