Market Commentary 28/03/16

EUR/USD – Breakout From Consolidation

EUR/USD has broken out from the consolidation the market has been in since last week, it could be possible the highs at  are in danger of being broken if the move higher continues.

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The breakout really started when the large range bullish candlestick formed 5 hours ago, the bank traders had been buying at the lows of the consolidation a small move lower at the open of the US trading session was the final opportunity for the bank traders to get long before the breakout got underway.

They brought on the bullish pin bar you can see previous to the candle with the arrow pointing to it, when all of the sell orders from the retail traders selling were consumed by the buy orders from the bank traders the market moved up, as more and more retail traders closed their losing sell positions the move up became more intense, we have a situation now where reactive retail traders have just begun to go long into the breakout which is why we are seeing some profit taking enter the market.

The main level to keep and eye on is the breakout zone marked at the top of the consolidation, the market may move back here in order to make any breakout traders who went long close their trades at a loss giving the banks another chance to place buy trades into the market, if you see a bullish engulfing candle form when the market is in this zone it could be a decent chance to get long.

 

USD/JPY – New High, Possible Break Lower Forming

 

USD/JPY has reacted to the supply zone we located in my last post, with the breakout on EUR/USD taking place we may now be in store for some downside movement which could take USD/JPY back to the lows of this current up-move.

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The resistance level marked above is the place you need to be monitoring for entries short, if the level holds and the market moves lower down towards the low of the last swing up near the gap you can see in the image, it could be the first signal we have as to a big move lower developing, for now stay vigilant and watch for candlestick patterns at the resistance for a possible short trade.

AUD/USD – Up-Trend Resumed ?

AUD/USD spent most of last week falling from the new highs the market made when it was trending higher, today we have seen the first indication that the pullback may be ending and the uptrend could be resuming.

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We saw the market nearly touch the 76.4% fib level which means the move lower was a deep pullback, a lot of retail traders probably went short on the candle with the X marked underneath it, these traders have probably closed their trades by now which is why we are seeing some selling entering the market, as bank traders can now take some profits off their positions.

The demand zone I’ve marked above is the level we need to be monitoring for an entry long, successive higher highs means the short-term momentum is up therefore if the market returns to this zone it could provide the next move up which will break the current high.

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