Market Commentary 20/04/17

EUR/USD – Breaking To New Highs

The retracement we were seeing yesterday ended up coming to an end shortly after my market commentary was published. The resulting move up has today caused the market to break to new highs, and it’s looking like we could see the momentum continue through tomorrow.

Unfortunately the market didn’t end up falling into the zone which I said to watch for entries long in yesterday’s post. It came close, but just missed it by a few pips. Luckily the move up we have seen today has created a new demand zone which can now begin using to watch for entries into long trades if the market falls tomorrow or next week. We may see it fall tomorrow as Friday is typically a day when the banks tend to take profits off their trades, so keep an eye out for entries long if you see a drop into the zone take place tomorrow afternoon.


USD/JPY – Large Spike Towards Supply Zone

The move towards the supply zone which was occurring yesterday did not continue last night, with a small drop pushing the market down to around the halfway point of the up-swing by the time today had begun. Since the open of the London session this morning another move higher has taken place, and over the past couple of hours this move higher has caused the market to break above the highs and move closer towards the supply zone.

It’s likely we’ll see a move into the supply zone take place later on tonight, but judging by the size of the move up we’re seeing now, I’m not sure if a move into the zone is likely to cause a reversal to occur or a retracement. If this current move higher continues I think we may see the market break through the supply zone, but not before the zone causes a small down-move to take place. If the current candles ends up closing as a pin bar, like we saw an hour ago, I think we’ll see the market fall and probably break through the current low, but only after a reaction as the demand zone has occurred.

For now I still think it’s worth watching for an entry short in the supply zone. Just keep in mind that if you see the market fall out of the zone with small candles that don’t cause much down movement, it’s a sign the move is simply just a retracement, and that the market is likely going to end up breaking through the zone very soon, so be sure to adjust stops accordingly if you see this kind of structure form.


AUD/USD – Retracement Out Of Daily Demand Zone

As expected a move higher has taken place today, but out of the daily demand zone the market dropped back into yesterday, not the demand zone I was expecting the market to fall into found just below.

Judging by the way the market has so far moved up today, I’d say that we are seeing a retracement take place, not a full on reversal caused by the bank traders getting more buy trades placed. Of course this could all change depending on the price action that forms over the next few hours, but with things as they are now, I think we’ll see this retracement come to an end later on tonight and the market will fall down into the demand zone seen at the bottom of the image.

I suggest you watch this zone for an entry long, because the retracement we’ve seen today could have been caused by the bank traders closing their sell trades before getting new long entry long trades placed at the zone. If this is the case we’ll see a move up out of the zone occur, so keep an eye out for large bullish engulfing candles forming if you see the market drop into the zone.

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