Market Commentary 28/09/16

EUR/USD – Retracement Back Towards Supply Zone

Yesterday we saw the market fall out of the daily supply zone and in the process create a new supply zone where I said to watch for entries short.

aviary-photo_131195463841531285After another small drop which took place last night, we saw the market move higher back towards the supply zone. You can see how the move stopped an hour ago by the appearance of a bearish engulfing candle. This engulf may cause the market to start falling again but I can’t be sure of this with the current price action we have seen form in the market. If the price continues to drop from the bearish engulf, I would draw a supply zone around the engulf and then watch for entries short if the market returns to the zone, because the drop from the bearish engulf is likely to have been caused by the banks placing some of their sell trades into the market.

If we don’t see the market drop, and instead it begins to rise again, watch for entries short in the supply zone created by yesterday’s drop.

USD/JPY – Sell Stops Not Hit, Market Moving Higher

The sell stops which had built up below the 100.000 level have still not been hit and the market has since moved higher out of the buy zone.

aviary-photo_131195488753718613I do believe we are going to see the market begin to move up soon especially because AUD/USD and EUR/USD are also looking like they are beginning to reverse. Another spike into the buy zone may take place before we actually see the market reverse so be on the lookout for entries long if you see the market enter the buy zone.

AUD/USD – Possible Reversal Taking Place

I think AUD/USD is currently in the process of reversing back down to buy zone seen on the daily chart.

aviary-photo_131195480948446437I did think we would see the market break yesterdays high and move into the daily supply zone before reversing, but with the price action we have seen form overnight, I’m now thinking that this may not be the case and yesterday’s high may end up being the high for the entire duration of this reversal.

So far three main swing highs have formed where the banks could have got their sell trades placed. Even though three have already formed I do think we’ll end up seeing another form before the market actually reverses. This swing high is likely to form close to where the others have formed as the banks like to get their trades placed at similar prices, so if the market continues to drop from it’s current location, the supply zone that will form as a result is the point you want to be watching for this 3rd swing high to form, as it’s found in between the 1st swing where the banks could have got sell trades placed and the two second swings where they might have got sell trades placed.

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