Market Commentary 22/11/16

EUR/USD – Consolidating Inside Daily Buy Zone

EUR/USD is currently consolidating inside the daily buy zone it fell into last Friday

aviary-photo_131243008380687352This consolidation has been created by either one of two things, either the bank traders are in the process of taking some profits off the short trades placed during the move down or they’re placing buy trades in expectation of a reversal back to the upside. At the moment it’s really difficult to say which one it is, in my opinion we are going to see another move down take place before a reversal occurs so watch for a move below the current low tonight.

 

USD/JPY –  Moving Towards Current Highs

After a small move down towards a demand zone occurred last night, the market is now on its way higher again and I don’t think it will be long before we see the current high in the market broken.

aviary-photo_131243018724645720I do believe we are going to see the market reverse out of this daily sell zone, the problem is it’s such as big zone that you don’t really know where it’s likely to reverse, in total this zone is almost 420pips


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At the moment the price structure on USD/JPY is kind of similar to EUR/USD in the sense that I can’t tell if we’re seeing the banks take some profits off their buy trades or if they’re placing sell trades to make the market reverse. I personally think we are going to see another move up before the market starts to retrace a large percentage of this move higher. If what we are seeing now was the beginning of a reversal, I’d expect the swing to be a lot bigger as the banks would need to generate enough buy orders to get all of their sell trades placed before the reversal occur. The swings that we’re seeing are only small so not many people are buying and selling during each swing meaning there is;t many buy orders coming into the market the banks could use to get their sell trades placed.

There isn’t really much we can do at the moment in terms of getting trades placed so it’s best to wait until tomorrow to see what new structure has formed.

 

AUD/USD – Falling Out Of Supply Zone

Yesterday we saw how the market was moving towards the supply zone that formed during the drop that took place last week, today the market has entered the supply zone and is currently moving falling out of it as we speak.

aviary-photo_131243044100063163This isn’t really a zone I would use to take a sell trade at the minute due to the fact it’s my belief we are going to see the market soon reverse out of the daily buy zone and retrace up to the supply zone you can see at the top of the image. Since the market wasn’t able to break through the high of the supply zone, it means the demand zone which had formed at the bottom of this retracement is not valid for trading, I think we’ll now see the market drop down and break through the low of the demand zone before either breaking the low of the daily buy zone itself or reversing back to the upside somewhere near the low of the buy zone.

Tonight watch for signs of a reversal taking place below the low of the demand zone.

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