The Weekly Volume Report: Divergence Materializes on the Euro Chart

Talking Points

  • OBV divergence potential positive for EUR
  • Overall volume picture remains supportive for USD/JPY
  • GBP/USD sees steady rise in turnover as Scotland vote looms

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Daily Volume Chart: EUR/USD

The Weekly Volume Report: Divergence Materializes on the Euro Chart

Charts Created using Marketscope – Prepared by Kristian Kerr

  • EUR/USD traded at its lowest level since July of last year this week
  • Daily volume has been in a steady rise since July which bolsters the medium-term downtrend
  • OBV, however, is sporting a minor divergence on the daily and is a potential reversal signal
  • However, dramatic increase in volume on a move through 1.3010 is needed to confirm that a more serious counter-trend move is underway

Daily Volume Chart: USD/JPY

The Weekly Volume Report: Divergence Materializes on the Euro Chart

Charts Created using Marketscope – Prepared by Kristian Kerr

  • USD/JPY touched its highest level in almost six years this week
  • A steady rise in volume has accompanied the move higher since July
  • The dramatic rise in On-Balance-Volume through the January highs is futher supportive
  • Volume decline over past few days as spot has reached new highs is a potential mear-term negative as exchange rate beginning to show signs of becoming overbought
  • Price move under 106.00on above average volume, however, would force a re-think of the broader positve bias

Daily Volume Chart: GBP/USD

The Weekly Volume Report: Divergence Materializes on the Euro Chart

Charts Created using Marketscope – Prepared by Kristian Kerr

  • GBP/USD fell to its lowest level since November of last year this week past week
  • Substantial volume rise over past few weeks bolsters decline
  • New yearly highs in OBV this week is also supportive of the downtrend
  • A daily close over 1.6305 on above average volume is needed to shift near-term bias higher

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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

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