Price & Time: Lack Of Volume Favors The Dollar

Talking Points

• EUR/USD recovers on weak volume
• USD/JPY consolidation sees diminishing turnover

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Daily Volume Chart: EUR/USD

Charts Created using Marketscope – Prepared by Kristian Kerr

• EUR/USD has rallied steadily from the 11-year low recorded late last month
• Declining volume during the recent rise suggests the advance is likely only corrective
• A modest push higher in daily OBV levels also favors an eventual downside resumption
• A close above 1.1525 on above average volume will keep focus higher

Daily Volume Chart: USD/JPY

Charts Created using Marketscope – Prepared by Kristian Kerr

• USD/JPY remains in consolidation mode below 122.00
• Decline in volume since early December suggests action since then is likely only corrective
• However, the persistent decline in daily OBV over past few weeks is a warning sign that a deeper decline may be unfolding
• A close under 116.35 on above average volume would turn us negative on the exchange rate

Daily Volume Chart: GBP/USD

Charts Created using Marketscope – Prepared by Kristian Kerr

• GBP/USD rally from the cycle low late last month has begun to pick up pace
• The lack of volume during the recent advance does suggest the move is likely only corrective
• The modest move higher in OBV also favors an eventual downside resumption
• A daily close above 1.5500 on above average volume would turn us positive on Cable

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--- Written by Kristian Kerr, Senior Currency Strategist for DailyFX.com

To contact Kristian, e-mail instructor@dailyfx.com. Follow me on Twitter @KKerrFX