A classic example of stopping volume on the 30-minute chart for CAD/JPY with the pair having been under pressure for some time as the rout in oil continues.
However, in this example we see Wyckoff’s third law in action, effort and result. The previous candle is wide in spread and the volume is high, so effort and result are in agreement. Then comes the next candle. The spread is narrow, but the volume is higher. Price and volume are now in disagreement and from this we can deduce this is strong buying and, therefore, we can expect to see a reversal in price in due course.
A long legged doji candle follows before the trend higher begins on excellent volume. Now price and volume are in agreement again and confirming this is a genuine move supported by the market makers.
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