Volume Pattern in EURUSD

Volume is helpful because, unlike the other technical indicators found at the bottom of the chart, volume is independent of price. Volume in stocks, currencies, and commodities is used to confirm the strength of a trend, and as a measure of the legitimacy of a market turn, or break-out. The higher the volume on the impulse bars, or candles, the stronger the move. It is that axiom that makes volume analysis helpful. Volume coupled with price not only tells us who won the battle for the bar, the bulls or the bears, it gives us the score. The chart below gives a good example of volume showing us who is muscling who around, the bulls or the bears. I've marked the high volume down candles, and high volume up candles so we can see that this most recent correction, or sell-off, in EURUSD was on relatively high volume compared to the last two months trade. Before we go reading too much into the bear case because of that higher volume, notice the last candle on the right of the chart, where the market tested and found support on the daily trend-line. That candle, or hammer, aka long-legged doji is from 11 AM to 3 PM EST, and came in on pretty good volume for what is normally a low volume time of the day. That higher volume doji on trend-line support is a consideration when gauging the legitimacy of today's late afternoon rally, and also a reminder that the long-term trend on this chart, and the daily chart, is stil pointed higher. [url]www.brewerfx.com/jnorrisedu/[/url] DISCLAIMER: Forex (off-exchange foreign currency futures and options or FX) trading involves substantial risk of loss and is not suitable for every investor. Risks include the potential that changing political/economic conditions may substantially affect the price/liquidity of a currency. Investors may lose all or more than their original investments. The impact of such events is already factored into market prices. The leveraged nature of FX trading means that any market movement will have an equally proportional effect on your deposited funds and may work against you as well as for you. In no event should the content of this correspondence be construed as an express or implied promise or guarantee from Brewer Investment Group, LLC or its affiliates that you will profit or that losses can or will be limited in any way. Loss-limiting strategies such as stop loss orders may not be effective because market or technological conditions may make it impossible to execute such orders. Past results are no indication of future performance. Information contained in this correspondence is intended for informational purposes only, was obtained from sources believed to be reliable, but is in no way guaranteed.