In March and beginning of April, while there were plenty of bad news for the Euro, with some commentators even speculating the Euro-zone would break, the professional money was actually accumulating. They do this using the added liquidity of people selling in panic, which allowed them to buy Euro’s without making the prices go against them. This can be seen by the green dots (Major Demand) of AT – VSA, and the very high volumes in that area.
Since then, prices have rallied and are now near the up trendline. It could see higher prices if the current downtrend in the lower timeframe’s is broken, and so it might be useful to check how’s H4 doing.
The down trendline was recently broken, but as the prices rose above it, the volumes dried out, in a clear demonstration of no demand. The last bar finally rejected the down trendline, on very high volume (red bar). This is bearish for the moment being, and I’d like to see this trendline being broken to take a long position.
GBP/USD
In GBP/USD there were multiple demand signals near the lower part of the channel, but since their lows weren’t sustained for much longer, this wasn’t accumulation, but rather take-profits on short positions. My trade ideas in H1/H4 are either to wait for prices to get near the support at 1.508, or if prices sustain the most recent lows, I can start thinking of the most recent demand signals (with a very high volume red histogram bar) as accumulation, which could change the trend. A selling climax, a wide-range candle making lower lows with extremely high volume, and which Analytical would mark as Major Demand, could also mark the end of this trend.
EUR/USD
EUR/USD on the other hand, already paused the downtrend ahead of the Pound, and more demand signals above the support at 1.081 would be a sign of accumulation (= long-term trend change). This could be bullish for GU as these usually go hand in hand.
In the most recent EUR/USD rally there was a short opportunity, at Thursday, as the background was weak and there were many weak signals, which made a significant downtrend very likely. Looking back, the major trend was still down, despite the pause at 1.08, and there was another important factor going on: the volumes of the most recent demand signals were surpassed the volumes of the most recent weak signals, which was an indication the rally was about to fail. The close was on a strong signal after the Dynamic Trend had already changed to up.
