In this morning’s forex session with Anna and David of Quantum Trading, the session starts with Anna considering some of the fundamental drivers for the British pound, and of course Brexit. Over the next few months we are likely to see increasing volatility as the negotiations reach their conclusion. Whether agreement is reached or not, one thing you can be sure of is that each statement or announcement will send the pound sharply higher or lower across the complex.

The New Zealand dollar was the pair in focus on the NinjaTrader platform bringing together many of the VPA lessons on the faster timeframes, with a decisive move lower signalled across the complex on the currency array and also on the currency strength indicator. One of the key issues for all traders managing the emotional stress created when a market pauses and reverses, in other words from the primary into the secondary trend, before establishing the initial trend once more. Here we have a classic example as the NZD/USD develops a price waterfall before pausing and reversing higher. This is the point at which we have to establish whether this is a primary reversal in trend to a bullish trend, or simply a secondary pause point. This is where volume price analysis steps in to give us the confidence to hold, or to close out if we think a position is reversing. The other indicators then also support this decision with the currency strength indicator signalling when a currency or pair are deeply oversold or overbought. And as expected the pair continues lower delivering further before finally moving into the congestion phase late in the morning.

In this example we also consider the currency array to view both sides of the complex, and finally to the currency heatmap where the pair is firmly rooted as the weakest of the twenty eight currency pairs. A great example of all the aspects of volume price analysis and supported by the Quantum trading indicators for both MT5 and NinjaTrader.