Some classic price action on the CAD/JPY daily chart and in particular several volume price analysis lessons to take away. First, note the volume anomaly on the wide spread up candle. Volume is average and therefore the market makers are not participating as the trap is prepared. Clearly volume and price are not in agreement and a sure signal of weakness ahead.
The price waterfall duly develops and note the rising volume in a falling market confirming the strength of the trend. Finally in the last few days we have had a two bar reversal on good volume with the currency pair looking weak. And remember, the Canadian dollar is closely associated with oil and with the recent fall in oil prices, this has also been reflected in the currency and one of the topics I cover in my free forex webclass.
I explain this in more detail in my free forex webclass – click to join here