Market Commentary 13/06/16

EUR/USD – Retracement Potentially Over

Last week we saw EUR/USD retrace a portion of the large move higher it made at the beginning of June, today we have seen the price make a bit of move higher that could signal the end of the retracement and a resumption of the move higher.

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Initially we had a smaller up-wards retracement take place soon after the markets opened last night. It looked as though the market was going to continue dropping once this retracement was over but as you can see, when the price dropped buying came into the market and pushed the price above the swing high found at the top of the retracement.

This drop broke past the 70% Fibonacci level which means it’s classed as a deep retracement, the kind of retracement the banks use when they want a reversal to take place. I think it;s still too early to tell whether this is definitely the end of the downwards retracement, at the moment it is looking likely but a break of the highs marked in the image is needed before we can start looking to get long trades placed.

For now monitor the market to see if the highs end up getting broken or if we see another drop lower. A drop lower may not mean the downwards retracement is continuing it could mean the banks want the price to fall back the low of the deep pullback in order to get more buy trades placed before the main up-move gets underway, so be sure to monitor the lows for signs of another move higher.


USD/JPY – Low Of The Retracemet Broken

Back on Thursday the market broke through the low of the retracement but it did not manage to close below it, this caused a small retracement higher that has now ended with the price breaking through the lows with multiple bearish candles actually closing below the low.

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From the image you can see how the most recent drop penetrated far beyond the low of the retracement and ended up making a new lower low. Since this new low has been made the price has risen back up to the retracement low and formed a bearish pin bar.

Now we need to watch to see if the market is able to break higher or lower from here.


AUD/USD – Price Moving Higher After Hitting Demand Zone

In my last post I marked a 1 hour demand zone that was found inside a bigger daily demand zone. Last night the market returned to the 1 hour demand zone and has begun moving higher.

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I’m not confident this move higher will push the market back above the highs of the retracement, I feel like the price will drop back into the daily demand zone and then begin advancing higher. If the current demand is going to push the price up past the highs, we need to watch for the high marked in the image to be broken.

A break past here would suggest the momentum is to the up-side and we can start looking for opportunity to get long. In the event of the price falling back into the daily demand bullish price action is needed in order to determine whether the market has a high chance of moving higher.

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