Market Commentary 10/01/17

EUR/USD – Last Weeks High Broken

The high I said to watch for a break in yesterday’s market commentary has been broken today, but it has not been broken by a distance large enough for me consider that the market is now going to start moving up through the highs of the sell zone.

You can see from the image the market only manged to move a small distance past the previous high made last week. If we had seen it move between 40 – 45  pips past it then I’d have probably said that it’s likely the market is going to keep moving up until the highs of the sell zone have been broken, but since it’s only broken it by like 10 pips, I’m not convinced the new high is signalling further upside. Also it means the demand zone still isn’t valid for trading because we don’t know what action by the banks has caused it form. At the minute it could have been created by the bank traders placing buy trades to make the market move higher, or it could have formed as a result of the bank traders taking profits off the sell trades they may or may not have got placed at the highs of this sell zone.

If the market had broken between 40 -45 pips past the high, it would have confirmed the demand zone somewhat because it doesn’t make sense the bank traders would get more sell trades placed that far away from a point where we suspect they’d already got some of their sell trades placed, which is last weeks high.

As far as entries are concerned I’m still not sure which direction to be trading in, but I think that if the market moves up from where it is now and breaks above the high again it’s worth looking for entries long in the demand zone. If it falls from where it is now and drops or spikes through the demand zone, start looking for entries short, because I think a move down into the buy zone will then take place. If it moves into the demand zone and begins moving up again without breaking the demand zone low, wait for tomorrows market commentary, because I’ll have to see how it moves up out of the demand zone to determine what that means for the market.


USD/JPY – Second Drop Into Buy Zone

Yesterday’s down movement continued throughout last night, and the market has today fallen all the way back into the buy zone which caused the swing higher seen at the end of last week to take place. A move out of this buy zone has occurred, but it’s been small and has not caused the market to move a large distance back into the downswing, which could be a sign we are going to see a drop through the buy zone take place.

If we see the market begin to move back up again, the supply zone created at the top of the drop which began yesterday is the point you need to monitor closely, because if this drop has been created by the bank traders placing sell trades, and the move back up to this point has been created by them as a means to get more sell trades placed, they’ll place any additional sell trades around the point where this supply zone has formed. This means we won’t see the market move a large distance past the high of the supply zone as that would suggest the drop hasn’t been caused by them placing sell trades to make the market reverse, and has instead formed as a result of them taking profits off buy trade placed inside the buy zone to make the market fall so they can get more buy trades placed.

If we see the market fall from where it is now and break through the lows of the buy zone, it’s a signal the upswings we have seen originate from the zone have been created by the bank traders taking profits off the sell trades placed at the swing highs seen inside the sell zone. This means a fall into the daily demand zone seen between the 111.320 – 113.892 levels is likely to take place and we should begin looking for opportunities to get a short trades placed to take advantage of this move down.


AUD/USD – Last Weeks High Broken

Last weeks high which was close to being broken when I put out yesterday’s market commentary was broken last night, which means I now think it’s likely for the market to continue moving higher into the daily supply zone found between the 0.74810 – 0.75238 levels.

The demand zone created by the move up towards last weeks high has not yet had the market return to it, but I think that if we see the price begin to stall from where it is now a drop into this zone is likely to take place followed by a move out of the zone, as it’s the most recent point in the market where the banks have a got a large number of their buy trades placed. The other demand zone created by today’s move higher is another point you can use to look for long trades, but only if the market manages to break through today’s high. If it doesn’t break the high, just watch for entries long in demand zone 2, because the demand zone created today is not considered to be that strong due to the number of sell orders that would’ve been coming into the market at the time it formed.



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