Market Commentary 31/05/17

EUR/USD – Almost At Current High

The move up we saw begin yesterday has continued today, with the market now coming close to reaching the point where the current high has formed.

Over the past few hours the momentum of the upmove has increased from what it was yesterday, with more bullish candlesticks forming than bearish ones. The momentum of this movement does suggests that we’ll see the current high broken either sometime tonight or over the next couple of days. For now the analysis  basically remains the same as yesterday, in that if the high gets broken it will signal more upside, but if a sharp drop occurs close to where the high formed it will be a sign the banks are potentially getting sell trades placed to make the market reverse.

 

USD/JPY – Moving Towards Current Low

Today we’ve seen the market continue to fall towards the current low that formed back on the 18th May. The move up into the supply zone I suggested may occur in yesterday’s market commentary did not take place last night. Instead the market started to fall after another small move higher took place in the early hours of this morning.

From the way things are looking currently I think we will see the market break through the current low soon, maybe tonight or sometime tomorrow. The break of the low will be a sign more downside is likely to take place over the coming days, and may be a signal that we are going to see the market fall down into the daily demand zone found at the 108.093 – 108.851 levels. The point you need to be watching for entries short if the market falls down to the low is the supply zone marked with a ?.

This zone encompasses the most recent points where the bank traders could have got short trades placed into the market. If they haven’t been able to get all of these trades placed, they may make the market move back up to the zone before it breaks the through the current low, so watching for entries short in the zone after the market has reached the low is the best course of action at the moment.

 

AUD/USD – Falling Back To Demand Zone

In yesterday’s post we saw how a move higher had begun after the market had dropped through the low made last Friday. Today this move higher has come to an end, and the market is now falling back down to the point where the demand zone which got spiked during the stop run formed.

The fact that this drop has been sharp, suggests we are going to see the market fall through the low into the demand zone later on tonight. If this happens it confirms the supply zone I’ve marked with a ? as being valid for trading, and you should use the zone to look for entries short. If the current move down terminates before the demand zone is reached, the supply zone is not valid for trading, but you should still expect to see a reaction take place if the market then goes on to move back up into the zone.

 

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