medium · Volume Spread Analysis effort-vs-result-spread
A 4-hour Forex chart for EUR/USD shows a sharp decline. A bar appears with an ultra-wide spread down, but it recovers to close at its mid-point. The tick volume for this bar is the highest of the week. The next bar is an up-bar with average spread and high volume.
What is the most accurate reading of this sequence?
- Stopping volume has arrested the decline
- A 'No Demand' rally starting from the lows
- The market is experiencing falling pressure
- A bearish two-bar reversal
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