Market Commentary 24/11/16

EUR/USD  Moving Towards Supply Zone

EUR/JUSD  is currently in the process of moving back towards the supply zone which caused yesterday’s drop to take place.

aviary-photo_131244736525941681What we need to see now is a move up past the high of the supply zone marked with an X. This supply zone is the most recent point in the market where the bank traders have got sell trades placed into the market, if the market was going to continue falling they would want these sell trades to remain open to make more money from the move down. If the market was to break above the point where these sell trades have been placed, it would be a sign the market might be reversing because they would not want to push the market up against their own positions.

For now watch for the market to break above the supply zone marked with the black lines. A break into here would give us more evidence today’s up-move has been caused by the bank traders placing buy trades to make the market reverse. At the minute the up-move could just be them taking profits off sell trades placed earlier on in the move down but a move up through the high of the supply zone would go some way into proving that this isn’t the case.


USD/JPY – Continued Climb Into Daily Sell Zone

The drive deeper into the daily sell zone which began yesterday afternoon has continued today with the market again managing to make new highs.

aviary-photo_131244787545219231At the moment the outlook is still the same as it was yesterday. We need to see some kind of evidence the market is reversing out of the daily sell zone. A relatively large bearish engulfing formed earlier on today, this engulf could have been created by the bank traders placing some of their sell trades into the market. If it is then we should not see the market move a large distance beyond the high marked with an X, as when the banks are getting their trades placed to make the market reverse they like to get them all placed as close together as possible in terms of the prices at which they’re placed at.

I think going into tomorrow and next week you should watch for a reversal out of the sell zone to begin somewhere just above the high marked in the image. A sharp drop will probably mark the beginning of the reversal so hopefully that will create a supply zone we can use to look for entries short.


AUD/USD – Moving Out Of Daily Buy Zone

After falling back into the daily buy zone last night, it seemed as though AUD/USD was going to continue falling down to the demand zone that formed at the bottom of the retracement, today though we have seen the market move back out of the daily buy zone again and it’s now heading towards yesterday’s high.

aviary-photo_131244759749346705If this move higher continues and we see the market break through the high marked on the image then it would be a strong sign the larger retracement is in progress. I’m not really sure where this retracement could come to an end but the upper supply zone drawn from the consolidation is a likely place due to the fact the banks got a large number of their sell trades placed there as evidenced by the long consolidation that took place before the market dropped creating the supply zone.

I think for the moment the main focus is still on the demand zone which formed at the bottom of the retracement. I don’t think we are going to see the market break above the high just yet, I think we’ll see a move down take place which will terminate either inside demand zone or somewhere near it, so watch for a bullish engulfing candle to form when the market enters the zone.

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