Market Commentary 09/12/16

EUR/USD – Continued Decline After Retracement

Yesterday’s large drop caused the outlook on  EUR/USD  to be one of more downside and today’s that downside has continued after a small retracement took place in the early hours of this morning.

You can see today’s drop has pushed the market back into the buy zone which formed back on the 30th of November. I think it’s unlikely this buy zone is going to cause another move higher to take place, it’ll probably generate a small reaction but not one that will push the market back up to the breakout zone and the supply zone seen above. The supply zone which has formed as a result of today’s drop lower is a place where I would look for any further retracements to come to an end as it’s the most recent point in the market where the banks have got sell trades placed.


USD/JPY – Supply Zone Broken By Move Higher

The move higher which began when the market hit the demand zone yesterday morning has continued today with the market managing to break through the supply zone this afternoon. With the supply zone now broken more upside is to be expected over the coming day’s and weeks. I’m not sure when or where this swing higher will come to an end so we have to stay vigilant for signs of a reversal beginning.

As you can see from the image, the market did fall a little after spiking the supply zone yesterday evening. The drop did not last long and by the early hours of this morning the market had broken through the high of the spike and pushed deeper into the supply zone. Because the market has pushed up through the supply zone it means the demand zone seen in yesterday’s post has now become a buy zone due to the fact we have more confirmation the three swings higher that originated from the buy zone were actually created by the bank traders placing buy trades.

For entries long I’d watch the demand zone seen just below the current price. This demand is the strongest zone closest to the current market price followed by the buy zone seen below. If the market returns to either of the zones next week, watch for signs of a reversal.


AUD/USD – Falling From Sell Zone

AUD/USD is currently falling again after returning to the sell zone which caused yesterday’s drop to take place.

Today’s drop means we now have five swing highs which have all formed at similar prices. I think the high made today will be the last high which forms before we see significant downside take place. Usually during reversals you’ll tend to see 3 or 4 swings form before the market actually reverses so for us to have 5 means we must be getting pretty close to seeing the market reverse.

If you didn’t manage to get an entry short when the market entered the sell zone don’t worry, because I’m confident we’ll see another move higher take place when the market returns to the demand zone marked in orange. If this demand does not cause any up-movement the daily buy zone sen at the bottom of the image probably will as the banks will look to take some more profits off the sell trades they got placed before the large drop on the 10th November occurred.

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