A nice congestion phase building on the 5m chart for the GBP/JPY and one which introduces several elements of volume price analysis. First, we have support and resistance here we see a strong region of resistance building with the red dashed line. This is on the accumulation and distribution indicator which displays graphically the strength of such regions. In other words the thicker the line, the stronger the region, so a strong ceiling of resistance building at 129.75. In addition, we are also trading at the volume point of control at 129.52. This is the fulcrum of the market at present with no bullish or bearish bias. In other words, the market is in price agreement where we have the heaviest concentration of volume. The key now is to wait for the breakaway from this region which will come – it’s a question of being patient and waiting. And on the move away we then move to consider the volume associated with the breakout which will confirm if the move is genuine. And finally, to help us once the move begins, we have a low volume node both above and below on the volume point of control histogram which will mean any price action here will move swiftly through these levels.
