Market Commentary 16/11/16

EUR/USD – Drop Out Of Daily Buy Zone

Today EUR/USD has just dropped slightly out of the daily buy zone it’s been in since the end of last week.

aviary-photo_131237825112188304Another tiny retracement took place last night before the market fell breaking the buy zone. The outlook has not changed with the buy zone now broken, I still think we are going to see the market fall into the buy zone below before reversing back up. I’m not quite sure where this reversal will terminate but I don’t expect it to reach the point where daily supply zone the market spiked when the election results was released formed.

There’s not much to do at the moment apart from wait until the market has fallen into the daily buy zone found below the buy zone which has just been broken. The sell zone still needs to be watched because we could still see a move up into it take place before the market drops into the daily buy zone below the current price.

USD/JPY – Profit Taking Entering The Market

USD/JPY moved higher again last night but is now falling after what I believe is the bank traders taking profits off their trades.

aviary-photo_131237885831096475The move higher did create a new demand zone which the market reacted to a couple of hours ago. The bullish engulfing candle which formed as a result of the market hitting the zone, pushed the market back towards today’s high but as you can see this past hours the bullish engulf has itself been engulfing by a large bearish candle. I think we’ll continue to see the market drop over the course of tonight, the demand zone below the current price at the 108.000 level is where I would look for entries long as it’s the last place where the banks could have got a large number of their trades placed. If they still have these buy trades open, they’ll come into the market and place more buy trade before the market is able to drop a large distance through the zone.

AUD/USD – Daily Demand Zone Broken

A large drop which began in the early hours of this morning has caused AUD/USD to fall through the daily demand zone it had been consolidating in since last Friday.

aviary-photo_131237873217250899With the daily demand zone now broken, the market is likely to start falling down to the 0.72000 level. There are a couple of daily zones on the way to the 0.72000 level which might cause small retracements to occur but overall I don’t believe they’ll impede the move down too much. I do think there’s a high chance we’ll see a retracement occur from the daily buy zone the market has entered today due to the that it caused two of the swings up in the consolidation to take place. The banks might take profits to cause the retracement to occur simply to make traders believe another swing higher in the consolidation is taking place.

For now keep an eye on the new supply zone that has formed from today’s drop lower and the supply zone that formed due to the move lower that took place last Friday. If a retracement out of the daily buy zone does occur, the market is likely to reverse at either one of these two zones so watch for bearish engulfing candles when the price starts moving up.

 

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