Volume signals return of buyers to the GBP/USD

6B_03-16_daily_chartFor the British pound, the new year brought little respite from the heavily bearish picture which continued unabated for much of January, against the backdrop of global equity markets in a temporary swoon as Chinese data continued to disappoint. The trend lower has seen Cable shed over 1000 pips in rapid time, moving from the volume point of control in the 1.5100 region, to ultimately trade at a low of 1.4079 on the 6B March futures contract, before finally finding some much needed traction last week. The driver for much of this move has been weakness in sterling, as opposed to strength in the US dollar, which itself continues to struggle to break through the 100 region on the dollar index chart. In fact it has been the continuous stream of weak fundamental news for the pound that has helped to drive the pair ever lower in early 2016.

However, that said, for volume traders, the stopping volume of the 19th January was a clear signal of insider buying, with the narrow spread price action and ultra high volume telling its own story, and the first sign that the bearish trend was reaching a pause point, and possible reversal on the daily chart. Indeed the volume of the 19th was the highest for several months, and since then the pair have rebased around the 1.4150, to currently trade higher at 1.4368 at the time of writing, with this morning’s GDP release providing further impetus to the rally higher. From a technical perspective it is the high volume node which now awaits in the immediate area above at 1.4370 that is likely to hinder further progress higher, but should this be breached, then a move to test the low volume region at 1.4500 becomes increasingly likely.

By Anna Coulling

Charts from NinjaTrader and indicators from Quantum Trading

About Anna 1054 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.

6 Comments on Volume signals return of buyers to the GBP/USD

  1. Anna I read all your books & want more! The last web was great even though you broke up a lot. When is the next one ? Can’t wait !

    • Hi Richard – many thanks for your very kind comments which are much appreciated and delighted you enjoyed today’s webinar. If you are registered for the webinars then you will receive details on the next one automatically so please don’t worry. This will arrive in your inbox in due course. They are normally scheduled weekly on Thursday’s at the moment and we run three, one early morning UK time, another to catch the US session and finally a third for the open of the physical exchanges in the US. You can find all the details on my site here, and I look forward to seeing you at the next webinar – all best wishes and thanks once again – Anna

  2. Hi Anna,
    This is Shahbaz from Pakistan. Last year I started learning forex and like any other trader, I lost some money. After trying 100s of strategies and not knowing what am I doing, one day I landed on a strategy which involved reading volume and price action. I tried to learn VSA but I was unable to understand what is written in VSA books/manuals. Thankfully, I found your books which not only helped me in understanding the relationship between price and volume but VSA as well (And in making some money too 🙂 ). All I want to say is a BIGGG THANK YOU and a HUG for writing such nice books. God bless you. 🙂

    • Hi Shahbaz – many many thanks for your very kind comments which are much appreciated and thank you for taking the time to drop by my site and write to me. I cannot tell you how much pleasure I get from reading comments such as yours and I am so delighted that in my own small way the books have helped you to become a consistently successful and profitable trader, which is so hard to achieve. For many traders, it is volume which is key which unlocks the door to this wonderful world of trading, and as I say in my VPA introduction, I was blessed to have started my own trading based on volume price analysis. Thank you so much once again and wishing you every success in the future – all best wishes and thanks again – Anna

  3. Hello Anna, just read your write on “WE ARE REACHING THE BOTTOM AND ITS TO ENJOY TO BUY.”
    I am a newbie to online trading on forex though you deal on stocks, but I seriously need a mentor and a guide. Please promise me you will accept my request and help me to understand per time your lectures, trainings and every other thing necessary. Keep up this good work, it will definitely speak for you.

    • Hi Zion – many thanks for taking the time to write which is much appreciated, and rest assured I will continue to write my market analysis on the site and elsewhere. You may be interested to know that I will shortly be launching an educational course centred around volume price analysis, and this will be available in the next few weeks. The course will be based on lectures, tutorials and workshops all in live markets and taught live by myself and my husband David. You will find the details on my site here in the next few weeks, and I hope you will be able to join me. In the meantime I hope you continue to enjoy my thoughts on the market, and you are also welcome to join us in our live webinars which we run each week for spot forex and futures, and again you will find details on my site here. Thanks again and all best wishes – kind regards – Anna

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