Market Commentary 07/04/17

EUR/USD – Second Stop Run Causes Spike

The stop run below the lows we saw take place yesterday did not cause a move above the current highs to occur last night. Instead the market started to fall, and today the fall has caused the market to break below the low of up-move created by yesterday’s stop run.

In turned out that some more sell stops had been placed just below the stop run low. When the market fell into these stops a couple of hours ago a large move higher took place, but this move eventually turned out to just be a spike, and the market has since ended up falling all the way back to the point where the spike originated from.

I’m not sure now whether the spike is a sign more downside is going to occur or is a sign more upside is going to take place. I think if we see the market move up back into the range of the spike over the next few hours it will be a good sign further up-movement could be seen on Monday, but if it falls and the market ends up breaking through the low of the spike, it’s a sign more downside is going to occur.


USD/JPY – Spike Into Demand Zone

The demand zone which we saw the market drop back into in yesterday’s post has caused another move higher to take place today. I said how if we saw another drop towards the demand zone take place, it’s likely we would see the market break through the zone and move lower, but that hasn’t occurred, and it now seems like a move up towards the supply zone is going to take place sometime next week.

The drop back into the demand zone which occurred a couple of hours ago failed, which suggests the bank traders have decided to use the sell orders generated by the drop to get buy trades placed. If this is the case we’ll likely see continued up-movement occur at the beginning of next week and push the market up towards the supply zone created by the drop. How the market moves up towards the supply zone will give us some indicator of whether or not it is going to break.

A sharp move up with bullish large range candles will be a sign the zone is going to get broken, but a move up which contains small bullish candles and lots of bearish candles will suggest we could see a reversal out of the zone take place, so be aware out that when watching the market next Monday.


AUD/USD – Reacting To Daily Demand Zone

Today we have seen the market fall into the daily demand zone it started to drop into when the retracement into the supply zone came to an end yesterday morning.

We have started to see the market react to the zone, but so far no signs of a reversal have been given. Ideally for a big reversal to now take place I’d want to see at least two swings form with their lows found at similar prices to one another somewhere inside the daily demand zone. A move into the new supply zone I’ve marked, followed by move back into the daily demand zone would be a sign the market is possible going to reverse, so long as the low of the second move down forms at a similar price to where the low of the move up into the supply zone originated from.

For now I’d just wait to see what price action has formed by the time the market has opened on Monday. At the moment there isn’t anything to suggest the market is going to reverse out of the demand zone, so waiting for more price action to form is the best course of action.

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