A terrific forex trading session as the London markets got underway and the pair to focus on here was the GBP/CAD which delivered in every respect, with a complete cycle of price action on the fast timeframes. First came the trend higher, then the pause and congestion, followed by the reversal lower into the downtrend. All of this great price action was confirmed with an analysis of volume and some wonderful volume price analysis lessons as always, with the indicators supporting the analysis.
The currency strength indicator led the way with the British pound (GBP) moving firmly higher, with the Canadian dollar (CAD) moving equally strongly in the opposite direction, and so creating a strong trend. Then came the reversal as both approached overbought and oversold regions before moving in the opposite direction as London opened. The support and resistance indicator also developed some strong regions and with the volume point of control, helped to define trading opportunities for trading the trend once underway.
Finally, on the slower timeframes, the volatility indicator was once again in evidence and sending a warning signal of congestion ahead.
By Anna Coulling
Charts from NinjaTrader and indicators from Quantum Trading
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