Market Commentary 05/04/17

EUR/USD – Consolidating Near Lows

No significant moves have taken place today on EUR/USD, so at the moment the market is still consolidating near the lower lows we saw form yesterday.

A move up towards the current high did take place last night, but the market was unable to actually break through the high, so it didn’t signal any further up-movement. The fact that we have now had multiple lows form around similar prices to one another suggests that a retracement is likely to occur, but ideally I’d want to see another low form before confirming this. For now continue to watch the supply zone for entries short.


USD/JPY – Large Up-Move Suggests Reversal

Today we have seen a large up-move push USD/JPY towards the supply zone created at the top of the move down which began last week. I said in yesterday’s post how a sharp move higher would suggest we are seeing a reversal take place, and the move we’ve seen today looks to confirm that.

The up-move hasn’t caused the market to enter the supply zone just yet, but I think it will only be a matter of time before we see it hit the zone and give off some kind of reaction. Because the market has moved up from the current lows, the area which they encompass now becomes a demand zone. It would be a buy zone, but we haven’t seen the market break through the high of supply zone yet, so we don’t know if this up-move has been caused by trade placing or profit taking. With the price action currently looking the way it is, I’d say that it’s trade placing, but I want to see how it reacts to the supply zone before confirming that.

For now I’d suggest watching the supply zone for entries short. If a sharp drop out of the zone takes place, it means a move back down to the demand zone is likely, but if a slow move out of the zone occurs, with only small candles and no big drops, it’s a sign the market is probably going to break through the zone when the down-move comes to an end.


AUD/USD – Retracing Into Supply Zone

I said in yesterday’s marked commentary how it was likely we’d see some kind of retracement take place soon due to the banks taking profits off their trades. Today we have seen that retracement begin, and it’s started to push the market up towards the supply zone that formed during the move down.

Looking at the current price action I’m not sure if the market is going to be able to reach the supply zone before dropping again, but it’s the closest place we have to watch for an entry into a sell trade, so if you see the market move into the zone tonight, I suggest you watch the zone for an entry short, as a drop into the daily demand zone about 50 pips below the current market price is likely to occur whenever the drop does begin.


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