Market Commentary 24/06/16

EUR/USD – Big Drop After Brexit, Recovery May Be In Progress

Last night Britain decide to leave the EU, the effect this has had on the market has been dramatic with huge declines taking place the likes of which have not been seen since the CHF crash back in 2014.

Aviary Photo_131112528897958627

The demand zone which I said to watch for an entry long ended up being broken when the results for the vote were released. Now the price has dropped the market is beginning to move higher again, whether this is because the banks are taking profits on sell trades placed before the drop or because they are placing buy trades to trap any traders who went short remains to be seen.

For now I would watch for the high marked in the image to be broken, this would indicate that near term momentum is to the upside and will give us a bias we can use to go long or short. The demand zone is also a place we want to be monitoring for an entry long but only if the high ends up being broken.

 

USD/JPY – Heavy Decline Due To Brexit


Up to $5000 bonus* with this broker

Trade with low spreads & world wide recognized broker

XM offers spreads as low as 0 pips, Negative Balance Protection, CFDs on Forex, Stocks, Indices, Gold & Oil.

Click here to apply.

  *Check broker T&C | Affiliate Disclosure

USD/JPY was also affected by Britain’s decision to leave the EU.

Aviary Photo_131112543809885414

The breakout we saw yesterday turned out to be an opportunity for the banks to place more sell trades which the inevitably did when the results from the vote were released. I think the up-move we’re seeing now is profit taking by the banks, it would make sense to secure some profits when such a large move has taken place so I think it’s likely we’ll continue to see the price fall next week.

AUD/USD – Referendum Causes Steep Drop

AUD/USD also fell a large distance because of the EU referendum.

Aviary Photo_131112565356120244

The drop wiped out all of the gains AUD had made against the USD since the 16th June, interestingly the market stopped falling upon hitting the point where bank traders had placed buy trades previously. This could mean the up-move we are seeing now is due to the bank traders placing more buy trades using the sell orders which came into the market when the news was released. Alternately the up-move could be the banks taking profits off sell trades they placed to cause the price to fall.

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"