Market Commentary 27/01/16

AUD/USD – Played Out As Expected

In yesterdays post I marked out a potential price path for which I thought AUD/USD may take today.

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Here’s how things ended up playing out……

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There almost an exact match !

Unfortunately, whilst I was able to successfully map the market direction the opportunities for placing trades were non-existent !

Ideally, I was hoping the market would produce a price action signal around the support level marked with a blue line. By the time the market had produced a bullish pin bar the market had moved too far for me to consider taking the trade. Not only this, the initial upthrust from the support level had faded somewhat, with more selling entering the market. This further decreased my expectation of the up-move being able to sustain itself for much longer.

 

USD/JPY – Continues Higher After Bullish Pin Bar At Support

 

The bullish pin bar discussed yesterday would have been a good trade had you taken it. Personally I like to enter the market with the smallest stop-loss possible ,which meant the pin on the daily chart was out-of-bounds. Luckily, another bullish pin bar presented itself on the 1 hour chart.

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The market was advancing quite rapidly until the FOMC came out a few hours ago making the market drop slightly from the highs made earlier in the day.

Because of this I decide to move my stop to break even. I’m still not convinced the move higher is over. The high made today managed to break the high put in place last Friday so as far as I’m concerned the up-move is still in place. If the market does manage to break the support level marked on the image, I would assume the market is likely to proceed lower to the 117.000 level. This is where the whole up-move originated from, the up-move were in now could just be the first structure in a another consolidation taking place. If this does end up being the case then the 117.000 level will act as support because the bank traders who brought down here either by taking profits or placing buy trades will want to protect the positions they have placed.

For now, watch the market tomorrow for signals of another up-move taking place around the lows found at the point where I’ve marked the bullish pin bar above.

Until these lows get broken by a swift down-move assume the up-movement is still in place.

 

 

EUR/USD Still Grinding Higher

 

In my post on Monday I mentioned how EUR/USD could move back to the highs of the range. Currently, the market is sitting at the open of the candles which make up the upper range boundary, this means we could see sellers come into the market quite soon to resell at the highs of the candles which make up the upper range. The selling these traders create may have the capacity to push the market back down to the lows of  1.0600, these lows make up the larger range which has been taking place since the main downtrend came to a halt.

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In fact, looking at the image above we can already see selling start to enter the market each time the a new higher high gets made. The fact that the higher highs are getting closer together rather than getting further apart tells me someone is becoming more and more interested in making the market fall. The last two swing highs you can see on the far right of the chart are also very close together.

Come tomorrow if the swing highs have not been broken and we see a sharp down-move containing large range candles I would take that as a sign the market is going to fall, at least to the point where the whole up-move began ( marked with the brown box )

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