Monday was a no demand bar : Up close, volume less than the two previous days, confirming my previous analysis of the 30-10-2009. But the candle of Tuesday was a really more interesting day and the most important of the week. You can see that volume was huge compared to all volume on the left and the candle is down, went behind the support line to finally close above it and in the upper half of the candle. How can the candle close like this if all the volume was selling ? Professional money was in fact buying during the day and it represents a key change of market sentiment. Moreover the next day is up, closing above the resistance line, so the high volume must have contained more buying than selling either for it to close on the highs, or for the next day to be up (sign of strength). I also call this kind of pattern a Spring.

Now, if you look at the candle of Friday you will see a down candle in volume particularly low, less than the two previous day, this is no supply. Market makers and professionals are not interested anymore to the down side, and a break of this candle from the upside will be a perfect entry for a long position.

We should see this break next week and a move up to the resistance at 1.5045 shortly after.

To conclude for this week you can see from my analysis of GBPUSD and EURUSD that my sentiment is really bearish for the US Dollar. Let’s see how it goes, and see you next week.