AUD/CAD - 5 minute

And so to an even faster timeframe, and here I have put together a collection from the 5 minute charts. The principles however are exactly the same, as I’m sure you appreciate.

We start at the left of the chart with a strong move away from congestion with the market makers participating on very high volume. The first two candles are in agreement with high volume and solid price action, and no wicks to the top of either candle. But the next candle suggests some weakness. More volume arrives on the subsequent candle with further weakness on the candle with the wick to the top. Finally at the top we have a two bar reversal, which immediately reverses the pair to the downside.

We then see some further weakness on high volume, but no advancement in price. There is a small move lower, and yet more weakness on the three up candles, one after the other, and all on high volume, very narrow spreads to the body, and with wicks to the upper body. This is certainly not a sign of strength, and a reverse is building here.

Then the bearish trend starts to pick up momentum on rising volume.

Congestion follows with two up candles on very high volume, and for comparison we only need to look to the left of the chart and the volume associated with the initial rally higher. Here we had a wide spread in price, yet here with only slightly less volume we have a narrow spread of price. This signals more weakness ahead. The market makers are selling into weakness in preparation for the next phase lower, with the bearish engulfing candle on the second of these signaling the re-establishment of the primary trend lower once more.