Anna Coulling > Forex Market Analysis > Cross Currency Pairs > A simple, straightforward set up to track currency sentiment across your chosen currency pair and reduce risk on the trade

A simple and effective way to track sentiment across your chosen currency and reduce risk on the trade is to look at the six major currency pairs on the same timeframe.By displaying all six charts side by side, you can quickly see the overall sentiment for that currency across the entire market. This gives you a much clearer picture than looking at just one pair in isolation.The beauty of this setup is that the inverse pairs naturally provide another valuable view of Volume Price Analysis (VPA). For example, if EUR/USD is showing strong bullish momentum, EUR/GBP or EUR/JPY may also reflect similar strength, while the inverse pairs (such as USD/EUR or USD/CHF) will often show the opposite sentiment. You will frequently notice that a currency appears bullish in some pairs (when it is the base currency) and bearish in others (when it is the counter currency). This contrast helps highlight true market sentiment and potential imbalances, allowing you to make more informed trading decisions with lower risk.

A simple, straightforward set-up to track currency sentiment across your chosen currency and reduce risk on the trade

00:22

Currency market price action overview

00:22

The speaker discusses current positive price movements in the currency market during a late trading session, noting the unusual timing as it is early evening in the UK. They introduce a simple, replicable workspace setup that tracks major currency pairs, displaying pound-dollar, Aussie dollar, and euro dollar along the top row, with New Zealand dollar, dollar CAD, and dollar Swiss positioned along the bottom.

00:48

Track currency sentiment across the currency matrix

00:48

The speaker explains a one-minute time frame display that shows sentiment towards the US dollar across six charts. Four of these charts typically move in the same direction if the sentiment is strong, as the dollar acts as the countercurrency. This setup includes the top three charts and the bottom left chart representing the New Zealand dollar.

01:18

Directional movement of currency pairs

01:18

The speaker explains that most currency pairs are moving broadly in the same direction, except for two pairs involving the dollar (USD/CAD and USD/CHF), which should move oppositely. This pattern indicates a universal market sentiment towards the dollar, where traders are either collectively buying or selling it. The method described provides a simple graphical representation of this market behavior, and it is noted that Ninja Trader software allows linking these currency pairs for better analysis.

01:57

Using time frames and visual sentiment

01:57

The speaker explains how to quickly switch between different time frames in a trading tool, currently set to one minute across six charts. This feature provides a visual overview of whether a currency pair is being widely bought or sold across the currency complex, which is currently the case.

02:30

Dollar CAD and Swiss inverse relationship

02:30

The speaker explains the inverse relationship between the US dollar and the Swiss franc, which typically mirrors the Euro dollar. The US dollar to Canadian dollar (USD/CAD) relationship has slowed and paused, diverging from the pattern seen with the US dollar to Swiss franc. Understanding these dynamics is important for trading decisions.

03:00

Importance of universal currency alignment

03:00

The speaker explains that trading currency markets requires understanding sentiment and flows rather than viewing a currency like the dollar CAD in isolation. The key is that the currency pair being traded aligns universally across the market, meaning that everyone is either collectively buying or selling the dollar. This alignment reduces the risk of the trade. Additionally, using this type of market display provides a different perspective on trading dynamics.

03:33

Volume price analysis application

03:33

The speaker explains how adjusting volume visuals helps analyze the inverse relationship in volume price analysis. They focus on the dollar CAD, noting significant volume in a particular candle that signals weakness. The method involves looking at trends from two perspectives: the top line indicating a potential reversal from bearish to bullish, and the bottom line showing a reversal from bullish to bearish, specifically for dollar CAD and dollar Swiss. This approach offers a simple way to apply volume price analysis by interpreting the same sentiment from opposite viewpoints.

04:38

Setting up currency arrays for trading

04:38

The speaker explains a straightforward method for analyzing currency pairs by setting up charts to observe distribution and selling on the top chart and accumulation or buying on the bottom chart. This approach is demonstrated using major currencies, but it can be applied to any specific currency pair, such as the euro with various crosses. The technique involves viewing volume through two perspectives—buying on the bottom and selling on the top—essentially applying volume-price analysis inversely across a currency array. The setup is manual but simple and adaptable to any time frame, offering clear insights into price action and trends.
By Anna Coulling – creator of volume price analysis

By Anna Coulling – creator of volume price analysis