Talking Points
- EUR falls to YTD lows, but volume diminishes
- Volume picture remains supportive for USD/JPY
- Glaring OBV divergence in USD/CHF a potential negative in the near-term
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Daily Volume Chart: EUR/USD
Charts Created using Marketscope – Prepared by Kristian Kerr
- EUR/USD fell to its lowest level in 14 months this week
- Daily volume has been in a steady rise since July which bolsters the medium-term downtrend
- However, daily volume over past week has been below average despite the new lows and is a possible sign of a fatigue in trend
- On-Balance-Volume has also failed to surpass the early September lows and is another sign that a correction is looming
- A move through 1.3010 on higher than normal volume is needed to confirm that a more serious counter-trend move is underway
Daily Volume Chart: USD/JPY
Charts Created using Marketscope – Prepared by Kristian Kerr
- USD/JPY touched its highest level since 2008 this week
- A steady rise in volume has accompanied the move higher since July
- The steadyc rise in On-Balance-Volume is supportive
- Price move under 106.80 on above average volume, however, would force a re-think of the broader positve bias
Daily Volume Chart: USD/CHF
Charts Created using Marketscope – Prepared by Kristian Kerr
- USD/CHF traded to its highest level in over a year this week
- Steady volume rise since May is supportive of broader trend
- Divergence in daily OBV, however, suggests the exchange rate is becoming vulnerable to a correction in coming weeks
- A daily close below .9295 on above average volume is needed to shift near-term bias lower
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— Written by Kristian Kerr, Senior Currency Strategist for DailyFX.com
To contact Kristian, e-mail kkerr@fxcm.com. Follow me on Twitter @KKerrFX