medium · Volume Price Analysis support-resistance
A currency pair has been in a tight 20-pip range for 4 hours. Suddenly, it drops 15 pips in one minute on a news spike, but the volume is nearly zero.
What should a VPA practitioner do?
- Buy immediately, treating this sharp news gap itself as clear proof the pair is now oversold.
- Sell immediately, treating the breakout from the tight range on this news spike as a high-probability trade.
- Place a sell-limit order at the original range floor, expecting old support to now act as fresh resistance overhead.
- Ignore the move; it is a 'trap down' where market makers are stop-hunting before a potential move higher.
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