Market Commentary 29/03/16

EUR/USD – Upside Subdued, Market Reacts To Breakout Zone

The upwards momentum from yesterdays breakout has subsided somewhat and we are currently seeing the market try to breakout back to the upside.

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The breakout zone mentioned yesterday failed to provide a bounce up, had you taken the trade the warning sign of an impending failure came from the bearish pin bar seen after the tried to bounce higher.

Another breakout zone which I failed to recognize in my last post ended up pushing the market up beyond the high put in place yesterday. The entry into the zone came with the bullish engulfing candle on the 15 minute chart. Had you traded this zone using pending orders it’s likely you would have lost money as the market penetrated the bottom of the zone before reversing.

The outlook now depends on whether the market cab break past the high made earlier today, a move past here would suggest more upside but we must wait for new levels to form in order to find a place where we can get long.

 

USD/JPY New High, Possible Break Lower Beginning

It looked like USD/JPY was set to break lower yesterday after spiking the supply zone, whilst a break lower didn’t materialize we are seeing the market make a second attempt right now.

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The resistance level I said to keep an eye on didn’t give the market the break lower I was expecting, instead the move failed and the bearish candle turned into a bullish pin bar which signaled the end of any downside momentum. The second time the market hit the supply zone a large bearish engulfing candle formed, this made it a higher probability entry than the first touched which occurred yesterday.

The zone we need to concentrate on now is the breakout zone marked in the image.

Although its unlikely for many traders to have gone short based on this breakout it remains the only level we have in the market which could provide the second wave of selling that will break the current lows, if these lows are broken the market will begin an extensive drop possibly back to the lows of the entire up-move.

 

AUD/USD – Demand Failed, New Highs Being Made

 

AUD/USD fell has made a big move higher over the past hour and is now making new higher highs.

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When the market fell it struck the demand zone and promptly failed, it then proceeded to fall into the 76.4% retracement level which you can read about in my new article.

The candle which spiked the 76.4% level would have looked heavily bearish when it was forming which means a large number of reactive traders probably went short with the expectation that the market was going to drop significantly, when the banks came in and brought off of these short traders the market began moving up and there was not enough sell orders to fill all of the buy orders coming into the market.

Another large move higher then took place which put the market into close proximity to the current high in the market, over the past 30 minutes we have seen all currencies make significant moves, on AUD/USD the market has risen 53 pips, if the current 1 hour candle stays bullish its a good sign of the upwards momentum continuing over the rest of the week.

For entries long watch the demand zone formed by the market breaking yesterdays high, if you see a bullish engulfing candle form inside this zone if the market returns it could be a decent chance to get long.

 

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