Market Commentary 22/07/16

EUR/USD – Lows Now Broken, More Downside Likely

The low which the market hit yesterday has now been broken and we are beginning to see the price fall.

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If the fall continues the next target will be the low made when by the drop caused by Britain announcing it’s exit from the EU. The drop we have seen today has created a supply zone we can use to look for potential entries short but I don’t think the market will be able to return to it before it becomes invalid.


USD/JPY – Yesterday’s Low Still In Place

Yesterday we saw the price of USD/JPY drop considerably after breaking past the high of the daily supply zone, today the low which formed at the bottom of the drop has still not been broken and the market might start moving back up to the supply zone that formed when the drop took place.

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There was a drop which took place earlier that made it look like the price was about to fall and break the low, this was counteracted by the appearance of a large bullish engulfing candle which is causing the current move higher. If the move higher is able to reach the supply zone wait for a bearish engulfing candle to form before entering short.


AUD/USD – New Lower Low

AUD/USD has also fallen today and is close to a demand zone that might potentially cause a reaction upon being hit.

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You can see how the market fell through the low a couple of hours ago, now there is some bullish candles entering the market which are likely to have been caused by the bank traders taking profits off sell trades. The demand zone I’ve marked is the point where you want to be looking for a long setup, this demand formed at a significant point where the banks had placed a large quantity of their buy trades that caused the move up to take place.

If they still want the market to continue its up-trend ( which I think is unlikely at this point ) they’ll come into the market and place more buy trades upon the price hitting the demand zone. As usual make sure you watch for a bearish engulfing candle to appear before entering long.

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