Dynamic trend: Turned up
Background: W1 – weak; D1 – weak
Phase: Markdown
Selling In EURUSD
In point 1 there was an up bar with a very wide range and high volume. The next bar was a down-bar, which indicates the predominance of sales over buying on the previous bar. VSA also identified selling in this area.
In point 2 and 3 – a series of “Up-Thrusts”; in point 3 the bar with a very wide spread and high volume, which emphasizes bearish interest from the smart money.
In point 4 there was a combination of reversal bars. The first bar was up-bar with a very high volume and wide spread, but close price was in the middle of the bar, which indicates supply. The second bar had a very high volume also, and it confirmed the sales on the first bar as it closes below the minimum. Subsequent downward movement was on low volume, that showed a lack of demand. Analytical Trader also identified selling in this area.
In point 5 these was a confirmed “No Demand” – a great point for a short.
Suggested Strategies
In the mid of the range it’s not recommended to trade. Consider a short if the price approaches the level of 1.13 and «No Demand» bar appears.
You can search «No Demand» and «No Supply» on the lower TF.
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Congestions Indicator
Based on the found congestion bars, after a market price confirmation, the indicator starts drawing a demand zone (for demand congestions), that extends into the future. These are zones where large traders are in control, since they represent the prices where they most recently bought the market heavily. Upon reaching these zones, price is expected to react by reversing quickly and/or show more demand, or if there is no significant reaction, a breakout can probably be traded.
Feel free to browse through the indicator’s page to find out more.
Full Package
We also released the ‘Full Package‘, which includes all the indicators in the website + templates with pre-configured alerts for each type of situation, and a guide on how to use this full package in trading.
Full Package in EURUSD H1
Try our Demo
These indicators are all available in the demo, so if you haven’t already, try them for free here!
Should you have any question, feel free to contact us.
Best regards,
Leonardo B.
On the previous week post about the Yen, we noticed that there was consistent buying in the hourly chart, and that a dip into the lower part of the range would give a long opportunity. This happened, and right in the next London session!
On trading ranges showing VSA buying signals, like we note on the trading guide, you can also wait for a breakout of the trading’s range high. If on the break, the volumes pick up, it’ll be a confirmation of accumulation. This is what happened in USDJPY, and since then, it has been on a long rally, until stopping on a long-term trendline.
Apart from the down trendline, the momentum of the uptrend is now fading, and there is significant supply showing up. This is inevitable on resistance areas, but still, if you’re holding a long in intraday, this is a good time to start reducing the position size, and wait for a trendline break to add into. Personally I’m holding a long daily trade, and waiting to see how the daily bar closes.
If the trendline is broken, it’ll be a long/adding signal. If supply keeps showing up on the hourly, and/or there are low volume rallies into the current selling bar, it’ll be a short signal.
According with the previous analysis, the volume’s “type” changed from demand to supply. Also, according with the previous analysis, on the level of the breakdown of 1.124 it was a great opportunity for sell on TF M15 with ratio risk: profit of 1:4.
In point 1 there was a combination of turning bars, which together can be seen as “Up-Thrust”. This is a significant signal of the weakness. At point 2 – the successful “No Demand”.
In point 3 and 4 these were successful “No Demand ” again, which confirmed the weak character of the market. In point 4, the signal can also be regarded as “Up-Thrust”. The low volume and narrow spreads suggest that supply has overcome demand.
In point 5 – two bars, one of which looks like an”Up-Thrust”, and the second – the breakdown of the support level of 1.124.
In addition, the weakness of the market confirmed the signals from TF H4: down bar with high volume in point 1, “No Demand” in point 2, followed by a decrease in prices, “Up-Thrust” in point 3 and the breakdown level of 1.124 in point 4.
Suggested Strategies
Consider only sell if the price will approach to the level of 1.124 and «No Demand» bar appears. Also, consider sell if the price breakdown the last low and «No Demand» bar appears. These should be searched in a lower timeframe.
Dynamic trend: Turned up
Background: W1 – weak; D1 – weak
Phase: Accumulation
Yen Daily Trend
On the daily timeframe there was bullish activity (signs of accumulation). In point 1 there was “Selling Climax” on a very wide range and very high volume. In point 2 there was a “Test” with a high volume. The market is not ready for a long-term upward trend, as the volume in point 2 is high, and the «Test» has failed, thus showing the weakness of the market. The accumulation continues.
Yen Hourly Range
On TF H1 in point 1 there was a “Shakeout”, followed by up-bar with a wide spread. The volumes were very high. Point 2 was the successful “No Supply” followed up bar that tells us that demand has overcome supply.
In point 3 it was a “No Supply “. This low volume in this spot, shows lack of the interest from the professionals to breakdown the low of the range.
Suggested Strategies
The end of the accumulation phase in the medium term should witness the breakdown of the level 101,150. At the moment, VSA is showing supply, and we may see a correction to the 100 level again, which may give a long opportunity. It’s important that the price doesn’t close below 100, as that would mean that prices will probably test the low at 99.5.
It’s a widespread notion that tick volumes don’t represent real volumes and so they are too unreliable to be used. This new article looks into the numbers to reach a conclusion about their reliability:
