USDJPY Volume Spread Analysis – Between a Range and a Trend
The Yen is on a trending channel, and recently got to the upper part of it. After an attempted break-out, the market quickly reversed, which was marked as supply by a purple dot above the candle. Looking back though, we can see there was an avalanche of demand bars around the 118.500 level. It was also accompanied by very high (red) volumes. Looking even further back, more such signals can be seen, starting from 18th March. This is actually a retracement of an uptrend started in January/2015, which is where that up trendline in the chart is coming from.
Given the accumulation signals, given enough time, the balance is tilted to the upside, so I’m not looking for shorts in this pair, even if there is a high chance that it’ll reverse to the support at 118.486, or even just to the up trendline – and there’s where I’ll be looking for longs, in a test bar. A break-out of the 120.842 with good volume would also be a good confirmation of the potential strength behind.