Market Commentary 26/02/16

EUR/USD – Falls On G20 Meetings

 

We saw a huge drop in the price of EUR/USD today.

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After advancing past the highs on Thursday night it seemed as though the market was set to continue higher, unfortunately what was said at the  G20 meetings sent the market into a downwards spiral.

The initial down-move created a new lower low, the market then stalled at the open of the bullish pin bar candle seen on Wednesday, ( it does seem like there is an edge to be had studying the open and closes of candlesticks, will really have to research this further) as the market was stalling it produced a bearish pin bar.

You could have traded this bearish pin but I think it’s unlikely many people would have due to the pace at which the price action was unfolding. The market then dropped even further, at the moment it’s in close proximity to a demand zone on the daily chart, its probable we will see some kind of reaction to this zone if the market manages to reach it sometime during the week.

Tomorrow keep a look out for price action signals near the resistance level, its probable the market may pullback up to this level before it continues its decline lower.

 

USD/JPY – A Run Higher From Demand

 

In comparison to EUR/USD and AUD/USD, USD/JPY saw a significant rise today.

The demand zone identified in yesterday’s post marked the beginning of a substantial up-move.

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The resistance level is a place where I’d expect to see some  stalling price action, this resistance falls inline with the highs of where the down-move originated from, if the people who sold creating the down-move sell again, then we could get a good entry into a short trade.

Going into next week I would begin looking for long entries around the support level, although we are not far away from the highs of the down-move, it could still prove to be profitable getting a long trade before the market has chance to fall.

AUD/USD – End Of The Up-Move ?

The move lower has created a large engulfing on the daily chart, I think its likely this marks the end of the up-move on AUD/USD, and its entirely possible for the market to continue moving lower back to the lows of the pullback by the end of next week.

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The demand zone mentioned in Thursdays post failed to provide another move higher, to begin with, as the market ran into this zone it looked as though we would see a bounce back up past the swing high set earlier that night.

As the market entered the zone it produced a bullish engulfing candle which would have been the entry into the trade had you taken it, after only managing to move slightly higher the market was then sent lower thanks to a large bearish engulfing candle, the down-move created be this pushed the market back through the demand zone and the candle ended up closing just outside of the zone.

The place to be looking for trades on Monday is the supply zone created as the market fell lower, Sam Seiden refers to these zones as drop – base – drops and typically I don’t like trading these zones, more often than not they tend to result in losing trades. However this zone falls inline with a resistance level which means it has that extra bit of confluence needed for me took consider taking it as a trading opportunity.

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