Market Commentary 08/06/16

EUR/USD – New Higher High

EUR/USD has broken out of the range which formed due to bank traders taking profits and has made a new higher high.

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The small amount of sell stops which had started to accumulate near the low didn’t get hit even though more appeared at a slightly higher price. The move up means the demand zone which I marked in the last post is not relevant anymore which is fine because the move up past the highs has created a new demand zone which we can use to get a potential entry long.

Tomorrow watch for a bullish engulfing candle to appear in the new demand zone for a potential entry long.


USD/JPY – Supply Zone Not Hit

Yesterday we saw some selling enter the market which put and end to the retracement that began last Friday.

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Now we’re seeing the price fall lower its likely for the current low to be broken. Once this low is broken it will open up the possibility of the market dropping below the low of the retracement seen on the daily chart. This would mean the downtrend is back underway and we could see the market move a large distance lower.

Tomorrow watch for a break below the current low, a full break is needed with the candlesticks closing below the low itself for it to be confirmed that the low is actually broken.  If the price just spikes the low and no candles close below it, there’s a chance a consolidation could be forming and we’ll need to adjust our strategies accordingly.


AUD/USD – Another New High

Yesterday we saw another big move higher take place and today that upwards momentum has continued although the market has only just managed to make a new high.

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We didn’t see a drop into the demand zone which formed yesterday so I think its now unlikely for this demand to cause a reversal if the market returns. There is another demand zone which has formed from today’s move but really I think the market has moved up enough for this zone to be used for placing trades.

For now monitor the price action to see if there are any signs of a larger retracement taking place. The move up we’ve seen today has not pushed the market a larger distance higher so the up-wards momentum could be stalling and the banks might be think about taking more profits off their trades.

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