Market Commentary 27/05/16

EUR/USD – Dropping Back Down To The Lows

 

I my last post I talked about how we had a good chance of seeing EUR/USD climb higher today and break the previous high in the market.

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We didn’t get a new high, instead we got a severe drop which has been going on for the past 7 hours. Its looking highly likely the market will break the current low and the downtrend will continue. There is still a chance that the down-move we are seeing will fail to break the low which would suggest the banks are placing buy trades into he market either from profit taking or by trade placing to make retail traders lose money.

For now we need to see if the low ends up being broken or not, if the price breaks the low but the candles do not close below it then it is not necessarily a confirmed break. To be a confirmed break multiple candlesticks must close below the low, if we don’t see that then the banks cold still be placing trades or taking profits.

 

USD/JPY – Stop Run On 1 Hour Chart

 

Another stop run has taken place on USD/JPY and is currently causing the market price to rise.

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The stell stops were found just the below the low of the last swing up, a common place for retail traders to put their stops.

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On Oanda’s open orders graph we can see the sell stops had built up around the 109.50 level which was right below the swing low. When these stops were hit it produced a bullish pin bar and since then the price has been rising. What we need to do now is watch if the market can break the high I’ve marked with a blue line.

A move past here will suggest more up-movement going into next week but the highs near the two supply zones will still need to be watched in case another move down develops due to banks placing more sell trades.

 

AUD/USD – Market Moving Back Towards The Lows

 

AUD/USD has also suffered a decline today and is on its way back to the lows of this retracement.

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Its going to be interesting seeing if the down-move manages break past the current lows as it’s not yet confirmed if the retracement has been causing by profit taking or trade placing from the banks. In terms of entries there isn’t any levels we can use to look for long or short trades, we must wait to see how the price action develops over tonight and reassess the market on Monday morning.