Market Commentary 18/11/16

EUR/USD – Large Drop Into Daily Buy Zone

Today a large drop has caused EUR/USD to fall into the daily buy zone that formed when the downtrend came to an end.

After moving back into the broken daily buy zone on Wednesday evening, the market started to fall out of the zone again yesterday morning. By the way if you wondering why there wasn’t any market commentary yesterday or any new supply and demand zones it was because an issue came up where it wouldn’t let me upload images to the site, I spent all day trying to fix ( because I’m in process of writing new articles ) but unfortunately couldn’t get it fixed by the end of the day. Luckily I’m found the source of the problem today and everything is now fixed, so you can expect to find the daily and 1 hour supply and demand zones page updated by the end of the weekend.

With the market now inside the lower daily buy zone I don’t think it will be long before we see some kind of retracement take place back up to the supply zone I’ve marked in the image. Once the market makes a solid break through this buy zone people will begin to realize the market is in a downtrend again, which means significant downside is likely to occur. I think it makes sense for the bank traders to get as many sell trades placed as possible before this downtrend continues, the best way to do that is by causing a retracment to occur out of this daily buy zone because people will think it’s just another swing higher in the overall consolidation.

I’m not sure whether we’ll see this retracement terminate at the supply zone marked on the image or somewhere near the points where the banks are likely to have got their other sell trades placed around the 1.13000 level. For now we’ll have to wait and see, when the retracement begins watch for a reaction to take place around the point I’ve marked in the image, the reaction to this area may push the market into a demand zone created by the beginning of the retracement which we can use to get a short-term long trade placed,

 

USD/JPY – Moving Into Daily Supply Zone

USD/JPY has finally reached the daily supply zone it’s been heading towards for the past two weeks, with the market now entering the zone it shouldn’t be long before we see a retracement take place out of the zone.

The retracement out of the sell zone will probably take place at the same time EUR/USD retraces out its daily buy zone, I’m not sure when this will occur but I would expect some kind of big news event to act as a catalyst for the retracements taking place so watch for the big news releases over the next couple of weeks. The move out of the demand zone we were looking at in Wednesday’s market commentary failed, with the market coming down and breaking through the low of the zone  (marked with a black line) a few hours after my market commentary was published. When the retracement out of the daily sell zone begins you want to be watching for a reversal to take place in one of the demand zones seen above.

In my opinion the demand zone closest to the current market price is the one which has the best potential of causing the retracement to reverse, due to the fact the banks were able to place a bigger number of their buy trades at the zone than at the other zones because of how many sell orders were coming into the market at the time the zone formed.

At the moment it’s best to wait until the market has moved deeper into the daily sell zone before placing any trades, it may be possible to get a short trade placed when the retracement begins so we’ll have to watch for signs of a reversal next week.

 

AUD/USD – Buy Zone Broken By Big Move Lower

On Wednesday we saw the market hit the outer edge of the daily buy zone which made up the lower boundary of the consolidation, yesterday the market broke through this buy zone which means the outlook now is one of more downside possibly back to the daily demand zone seen at the 0.72456 – 0.71400 level.

Right now the market is actually inside a weak daily demand zone that formed back on the 28th of June. If we see a retacement occur on both USD/JPY and EUR/USD we’ll probably also see AUD/USD retrace out of this daily demand. If this is the case watch for an entry short in the supply zone marked with an X. This is currently the strongest supply zone out of the three I’ve marked in the image, expect to see the market react when it reaches the other zones, just don’t expect it to reverse until it has reached the supply zone marked with an X.