Terrific trade on the EUR/AUD as the London forex market opens
We follow a great trade on the EUR/AUD which develops nicely during the session.
00:11
Introduction to Euro Aussie currency analysis
00:11
The speaker discusses their experience with the Euro/Ozzy currency pair, highlighting it as a prime example of analyzing currency strength using charts and indicators across multiple timeframes. They emphasize their focus as a reversal trader and describe witnessing a setup forming in this context.
00:59
Multi-timeframe currency strength overview
00:59
The speaker discusses analyzing the euro currency across multiple timeframes—3, 5, 10, and 15 minutes—to get a comprehensive view of its movement. Early in the session, trading conditions were congested, making it difficult to find trades. Patience is emphasized while waiting for a move developing consistently across different timeframes. The euro showed strong climbing momentum on shorter timeframes, with similar patterns emerging on the 10- and 15-minute charts, although moves tend to be less pronounced on slower timeframes as expected.
02:02
Euro and Aussie dollar trend comparison
02:02
The segment analyzes currency movements, focusing on the Aussie dollar and the euro. The Aussie dollar is described as strongly overbought and then sharply declining across multiple time frames, indicating a consistent downward trend. The euro shows very strong buying activity, with steep upward lines reflecting strong momentum. Both currencies exhibit clear, strong directional trends over various time horizons, demonstrating significant market strength or weakness.
03:03
Monitoring trend reversals and pullbacks
03:03
The speaker discusses the ongoing trend in Urology trading, emphasizing that if one hasn’t taken the reversal trade yet, the trend is still developing and can be joined. They highlight the importance of considering one’s time horizon, noting that shorter time frames like the three-minute and one-minute charts show pullback reversals forming.
The example of the Aussie currency is used to illustrate how these reversals may develop into a full primary trend reversal—from bullish to bearish—causing the price to become overbought and then move lower. The speaker points out that these reversals can occur at different levels and times, requiring constant monitoring to anticipate when the trend might start declining.
04:01
Volume price analysis and indicator use
04:01
The speaker explains how real-time charts serve as the foundation for understanding market movements, focusing on volume and price analysis alongside indicator signals. For example, if the euro reaches an overbought condition on a short timeframe like three minutes, it may pause, congest, or reverse, offering traders valuable clues. The discussion also covers stop-loss management, noting that traders using shorter timeframes tend to set tighter stop-losses, while those trading on longer intervals like 10 or 15 minutes allow for wider stops to accommodate typical pullbacks.
04:59
Stop-loss strategies for reversal vs trend
04:59
The speaker explains the rationale behind setting wider stop-losses when trading reversals due to the need to accommodate price fluctuations and buffering before a reversal occurs. In contrast, when entering a trade during an ongoing trend, stop-losses can be tighter because momentum is already established. The trade-off is that reversal traders accept higher risk for potentially higher rewards by entering early, while trend followers face lower risk but also lower returns as they join moves already in progress.
06:16
Risk and reward in trading approaches
06:16
The segment explains the basic mechanics of trading, emphasizing that taking on more risk should correspond to expecting a higher reward, and vice versa. It also discusses recent market movements, highlighting strong buying in the US dollar, the Australian dollar performing well, significant buying in the Canadian dollar, and strong selling in another currency.
06:43
Currency pairs and momentum considerations
06:43
The speaker explains how currency pairs moving in the same direction, such as the euro and the dollar, show no differential momentum, similar to two trains leaving a station at the same speed. The currency strength indicator helps identify which currencies to focus on by highlighting those with clear momentum and also signals which currencies to avoid, including those moving sideways or in congestion, like the yen currently fluctuating with little directional movement.
08:07
Volume and resistance analysis with indicators
08:07
The discussion covers the current market uptrend despite minor pullbacks, highlighting a significant volume increase in a recent candle. Key support and resistance levels are identified using volume price analysis tools like the accumulation distribution indicator, which shows stronger resistance or support where the lines are thicker. Various trading platforms such as MT4/5, NinjaTrader, and TradeStation reflect these levels, providing a price base for resistance formation. A notable resistance level around 1.77850 is emphasized as a strong barrier compared to more minor resistance points.
09:18
The volume point of control, representing the market’s heaviest volume congestion area, is explained as a key fulcrum during the bullish trend. The volume histogram integrates volume, price, and time to reveal congestion levels and potential volume-based resistance, complementing price-based resistance markers such as the strong red dashed line. As the market approaches higher levels, volume diminishes, indicating lighter resistance and suggesting that price should move through these zones more easily and quickly. This insight is crucial for traders to anticipate market movement and resistance behavior.
10:49
Trend monitor status across timeframes
10:49
The speaker reviews various timeframes, noting that the trend monitor remains stable and blue across different horizons. Although there are no changes yet at the 15-minute mark, this is expected if the market continues its current momentum. A strong support platform is identified at V pop, and the market is currently pushing higher. The segment ends as the speaker passes the discussion back to Anna.
By Anna Coulling – creator of volume price analysis
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