Market Commentary 16/03/16

EUR/USD – Consolidation Broken, FOMC Breaks Highs


EUR/USD has broken out of the consolidation it has been in for the past couple of days and is now about to make a new high after the FOMC release came out negative for USD.

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We did not see a large build of stops around the 1.700 level, the buy orders which I made the mistake of thinking were take profit orders from traders who were long, actually turned out to be pending orders to buy placed by traders who believed the market was going to break to the upside from the consolidation.

When the market dropped and hit these orders the traders were entered into their long trades.

It’s highly likely these traders closed their trades before the FOMC was released. When traders have trades open before a big news event they tend to close them as their not sure what effect the news is going to have in the market. Since the traders placed buy orders which were at a loss when the market dropped, there a high chance the majority of them closed due to the fear felt by them not knowing if the FOMC was going to cause the market to fall or rise.

As far as trading opportunities are concerned I would keep an eye on the 0.75271 support level for entries long.


USD/JPY – Drops Lower From The Upper Consolidation Boundary


The market didn’t end up dropping into the lower boundary zone marked out in yesterday’s post.

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Instead it turned at the two swing lows which make up the most recent consolidation. We now have a situation where there is one consolidation which has two lower boundaries. The one which the market turned at last night and the one found just below it, the upper boundary remains the same as all the swing highs forming this consolidation are in a similar price range.

I think the FOMC release has signaled the end of this overall consolidation.

There a high chance we’ll see the market continue to drop over the rest of the week, what we need to do now is wait for the market to give some more structure to trade. At the moment there isn’t really any levels or zones we can watch for price action signals to get short, I would wait until you see signs of banks taking profits off of this down-move before taking any short trades.


AUD/USD – FOMC Pushes The Market Out Of Daily Demand


The FOMC release has pushed AUD/USD out of the daily demand zone we identified back on Monday.

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Today’s drop into the zone was more significant than the one seen yesterday which pushed the market into the zone. The move up caused by the FOMC news is likely to stall quite soon due to pro traders taking profits, this should create a small move down which may or may not hit the support level marked above,. If the market manages to reach this level watch for bullish engulfing candles to get an entry long into the up-move.

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