Market Commentary 09/08/16

EUR/USD – False Breakout ?

The past few hours has seen the price of EUR/USD breakout of the range it has been in since last Friday.

I’m not sure whether this breakout is a real move higher or if it’s simply a false breakout which the banks have made occur because they want to get more sell trades placed into the market. For now I’d just wait to see what happens, if the move up continues watch for a bearish engulfing candle to form inside the supply zone.

 

USD/JPY – Moving Lower Out Of Sell Zone

Today we have seen the market fall out of the sell zone and it is now approaching the demand zone which I sent out to my subscribers.

The decline out of the zone really began last night a few hours after yesterday’s post was published. The drop out of the zone was only small and it wasn’t long before a move higher looked to be taking place. The two bullish candles which created this move will have no doubt mislead lots of traders into thinking the market was getting ready to move higher and break through the swing high that was created by the price dropping out of the sell zone.

The banks used the buy orders generated by these traders buying to get more sell trades placed in anticipation of a move lower, we can see they did this twice. First when the price moved up with the two bullish candles at 2:00am and then again when London session began at 8:00pm.

The wicks we’re now seeing appear on some of the candles are likely to be caused by the London traders taking profits off the sell trades they placed back when the London session opened this morning. This profit taking might be enough to cause a slight retracement back up towards the high of today’s drop, if this is the case watch for another drop to take place around the low that were broken by the drop.

 

AUD/USD – Reversal Still Possible

Another day another new high for AUD/USD, similar to yesterday we might have a new high but there still a chance the market may be reversing.

The reason I say the market may be reversing is because of how close each of these highs are to each other. Even though today’s high is 15pips higher than yesterday’s high we could still see the price fall down to the lows if the banks get decide to get more sell trades placed.

In the event of the market falling lower the next point of interest I would focus on is the buy zone seen above the demand zone. This buy zone formed from bank traders placing buy trades into the market, if they want these buy trades to remain open they must stop the market from falling below the zone if it does in fact start to move lower.