USDCHF – Accumulation and No-Demand Zone
The 4-hour chart of the USD/CHF once again shows a minor supply signal, which, taking into account weak background of the market, may mean that the bearish trend will continue. Such amount of market supply may lead to the further down motion, due to which the price may fall to level of the previous support around the 0.966. On the chart there are three important zones, which shows the activity of large players. The first zone is the beginning of bearish trend. There are several supply signals both on the current and on the daily chart. Next, after few short candles with low volatility, comes another bearish signal (minor supply), which leads to the subsequent rapid fall of the price.
Then the price almost without any stops passed to the next, second zone, where we can see the highest volumes, which were present in the market in recent months. In the H1 there was a minor down reversal, marked by Major Supply signals, but after more demand seen from upper timeframes, the trend finally reversed.
In the 3rd zone the price reached the resistance level in the area of 0,999. Here we can see that volumes usually don’t exceed its average value, so we may define this situation as lack of demand. There is however one signal in favor of buyers (no-supply test near the 0,986 level), and the background is strong. However, higher amount of bearish signals, which were detected by VSA Indicator, and a successful no-demand test (pink bar), confirms that the market is still weak. In this case, if the background turns weak, the possible point to open the short position would be below 0,995 level and stoploss above the 1.000. Still we must remember that there were large volumes and strong demand signals in zone (2), so we should be alert and prepared to act quickly in case the big players keep accumulating and open new buy positions.