Market Commentary 18/02/16

EUR/USD Fallen Through Daily Demand

The daily demand zone EUR/USD has been fluctuating in over the past few days was broken by a drop lower earlier today.

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The large collection of sell stops I showed you on Oanda’s open order graph yesterday were also hit but failed to provide any meaningful up-movement, with a new lower low it’s looking likely EUR/USD may continue to fall tomorrow.

In fact over the past couple of hours we have sen a bearish pin setup occur on the 1 hour chart, the swing lows marked on the image provided the resistance level to which this pin formed at, additionally the move up to this resistance may have been a way for the bank traders to make all the breakout traders who entered short when the market broke the lows lose money, they know by pushing the market back up to this resistance many of the breakout traders will get the opportunity to close their trades at break-even or a small loss, by closing their trades they are putting buy orders into the market, these buy orders may be used by the bank traders to place more sell positions into the market.


USD/JPY – Fallen Into 1 Hour Demand

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The demand zone created by the stop run yesterday was spiked earlier, at the moment the market is still in the demand zone, it was hit earlier this afternoon but the rebound was not strong enough to push the market higher, this zone could still provide us with a bounce higher so long as the low does not get broken, watch for a break above the swing higher tomorrow for confirmation of a move higher.

If the low does get broken it would be wise to look for a retest at the resistance level marked in the image, a pin bar or engulfing candle at this level could proved us with a good opportunity to get short into the larger downtrend.


AUD/USD – Bullish Pin Bar At Support

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After making a new high last night AUD/USD suffered a large drop around 1am, its likely this drop was caused by the unemployment figures coming out worse than expected, the market would have kept dropping were it not for the support level marked in the image.

This is the same support we saw the bearish engulfing candle setup appear yesterday.

We did get a bullish pin bar setup at the level, this pin is a  great example of why you should always put your stop-loss a few pips below the low of the pin, had you placed your stop at the low of the pin you would have lost money when the next bullish pin hit the support as it just drops below the low of the first pin.

A break above the current high is now needed in order to confirm a continuation of this up-move, the fact that the market has hit this support three-times with each one being a failure suggests to me that its likely the market will advance higher tomorrow.

For now keep an eye on the current high marked in the image, if you see it get broken watch for a retest on the 0.71661 support level.



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