Market Commentary 20/09/16

EUR/USD – Falling After Hitting Breakout Zone

EUR/USD is currently falling lower after hitting the breakout zone which I said to watch in yesterday’s post.

aviary-photo_131188551516239103I also said to watch for an entry short in the big supply zone found above the breakout zone but I actually forgot to mark this supply zone in yesterday’s post which is why you may have been slightly confused as to why I said it. We can see there were two runs into the breakout zone, the first occurred around an hour after yesterday’s post was published and the second took place when the London trading session opened today.

The drop which took place after the first run into the zone was not able to break the low of the move up which is why I think we saw another move into the zone take place this morning, I think the same will end up happening if the market is unable to break through the low marked on the image. If the market doesn’t break this low within the next few hours a move back into the breakout zone is likely to take place and it’s possible we’ll see the high of the second spike into the zone get broken because if you check Oanda’s open orders graph you’ll see there are buy stops accumulating just above this high of the spike, the banks may push the market up to purposely hit these stops to get more of their sell trades placed into the market.

I would say that you should watch for entries short around the bearish pin bar that caused this current drop to take place, if the market rises up here and breaks through the high wait until you see a bearish engulfing candle form before going short.

 

USD/JPY – Second Drop Into Buy Zone

Today we have seen the market make a second drop into the buy zone we suspect is going to cause the market to reverse.

aviary-photo_131188571187283485The first drop into the zone took place yesterday and it did cause a move higher to take place although it wasn’t able to break above the highs of the previous drop. This lead to another drop into the buy zone which occurred early this morning. Since then we have seen another move higher out of the zone, but again, the high of the previous drop has not been broken which suggests we’ll see the market drop deeper into zone before any kind of reversal takes place.

For now keep an eye out for another drop deeper into the buy zone and watch for signs of a reversal taking place.

 

AUD/USD – Moving Sideways After Zone Marked In Yesterday’s Post

AUD/USD did end up falling into the zone I said to watch for entries long in yesterday’s post but so far it hasn’t been unable to break through the high the market made yesterday.

aviary-photo_131188612609866133

 

From the image you can see the sell zone hasn’t actually been broken yet which leads me to believe there is a chance of the market falling from here instead of rising which is what thought would’ve taken place by now. If we do see the market fall below the lows of the up-move out of the area I said to watch for entries long, I would start looking for short trades around the point where the down-move began because if the banks have placed sell trades to cause this down-move to take place, they may still have some trades left which they need to place. This means the banks will have to make the market move back up in order to get people to buy so they can use the orders to place their remaining sell trades into the market.

 

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