USDCAD Intraday Volume Spread Analysis
At 17th April, there was a significant selling climax in the market, marked by a green signal with a corresponding red volume in the histogram, at values way above the average. Since then, there was an attempted rally, but the volumes didn’t pick up nowhere during the whole rally, showing lack of interest by professionals. Without demand, the market had to go down to test the previous area of demand, and/or continue the accumulation.
Right now, the market is testing for supply, which can be seen by the gray bar in the histogram, with the candle making lows on the lows formed by the selling climax. If the test is successful (= no supply), the market should rally in the next few bars, because the smart money will jump in such an indication of strength. If it’s not, it’ll stall or even break the support. This is yet to be decided, and there is another factor going on – the market is trending lower, making successive lower lows. So for a possible long I’ll wait for prices to at least rally and make a dip where that red rectangle is, confirming a successful test and a change in the trend. If however this support is to be broken, the prices aren’t too far off the lower part of the channel, where a future price reversal can take place.