Currency majors picking up the tone once again

6B_daily_2016Whilst the Japanese Yen and the Aussie dollar have started 2016 with a bang, for other currency majors it’s been a case of picking up where they left off in 2015, and none more so than the British pound which continues to remain under pressure having finally breached the psychological 1.5050 level in mid December. This is what I wrote at the time :

Moving to the British pound and the 6B futures contract, it was the ECB who provided the volatility, with Thursday’s wide spread up candle triggering the volatility indicator as the price action moved outside the average true range in this timeframe – an unusual occurrence, and one which laid the foundations for a trap, with the pair returning to the longer term bearish trend once the dust had settled, and now moving to test the 1.5000 region in early trading. With the low of Thursday’s candle now in place in the 1.4900 region, a return to test this area now looks increasingly likely, and should this be breached the way will then be open for a deeper move to the 1.4600 last seen in April.’

…and with the 1.4900 now firmly breached and with a high volume node also now in place at this level, the longer term outlook for the GBP/USD continues to remain bearish. In early trading the pair have attempted to rally to test the 1.4800, but once again look weak with a move through the low volume node at 1.4700 now looking increasingly likely.

6C_daily_2016The Canadian dollar on the 6C is following much the same pattern as the pound, with bearish sentiment continuing to remain firmly in play, with resistance now building in the 0.7230 region. Volume in the price waterfall of mid December were heavy and confirming the selling pressure, with the volume point of control and sustained resistance in the 0.7450 – 0.7500 area, which too is adding further weight to the move lower, with the combined effects of a slump in oil prices, and sustained US dollar strength completing this potent mix. Any move through the floor of current potential support in the 0.7150 region will then open the way for a further leg down, but much will depend on crude oil with Iran now in focus.

6E_daily_2016Finally to the single currency which continues to remain rangebound and trading within the spread of the volatility candle of early December, with the VPOC now perched in the 1.0950 region. The immediate levels of significance are at 1.0800 below where a low volume node awaits, and if this breached then we can expect to see a further decline for the EUR/USD and a move to test the support platform now in place at 1.0600 during the early part of the year.

By Anna Coulling

Charts from NinjaTrader and indicators from Quantum Trading

About Anna 1040 Articles

Hi – my name is Anna Coulling and I am a full time currency, commodities and equities trader. I have been involved in both trading and investing for over fifteen years and have traded many different financial instruments, from options and futures to stocks and commodities. I write and publish articles ( mostly for free ) for UK and international publications on a wide variety of financial issues, and in particular I enjoy helping others learn how to invest and trade.

3 Comments on Currency majors picking up the tone once again

  1. hi,dear are you?first of all,thank you for your brilliant analysis.I`ve been familiar with your analysis through the book (a complete guide to volume price analysis) and they have been so practical and interesting for me. I wanted to talk to you about gold chart in monthly chart with strong break in 1080 level,it seems that long trend of gold is still bearish(I can send the related images if you have any email or telegram application).but, in weekly and daily chart, it seems that considering 1040 level, there is an absorb.(although it can be fake and needs more consideration),I`ll be grateful to have your analysis about this question and also about the gold chart.
    I`m connecting from Iran, and you know that we have issues buying foreign books,so I dont have access to your other books,i found this book from the Internet by chance.would you please send me your other resources to my email,because I like to know more about your methods and techniques.
    sincerely yours
    Esmaeel, Iran
    telegram: +98 9112376169

    • Hi Esmaeel- first of all many thanks for taking the time to write and thank you also for your very kind comments which are much appreciated, and I’m so delighted that you have found my Volume Price Analysis book to be helpful in your own trading. With regard to all my books, they are on Amazon and I do appreciate that this can be difficult for some readers around the world. The books are available in paperback and I’m not sure if this makes a difference for you, or whether all Amazon books are unavailable, but if not, there is little else I can suggest. I am in the process of developing an education course which will cover all the aspects of volume price analysis, and these will be available in the first quarter this year. They will all be live sessions with myself and my husband David, and will be a mixture if lectures, tutorials and live trading sessions. The details will be posted on my site in due course so please do check back in the next few weeks. Finally with regard to gold, the bottom is not in just yet, although gold prices are certainly benefiting from the risk off sentiment which has been triggered by both Chinese data and North Korea. I will be writing some further gold analysis in the next few days. Thanks once again and wishing you every success in your trading – kind regards Anna

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