EUR/NZD: Volume Profile Analysis đź””
Hello guys,
there were some wild movements on the NZD in the Asian session today. This created some new trading opportunities and in this analysis, I would like to have a look at one of them. This one is on the EUR/NZD.
Volume Profile analysis
Before the strong sell-off in today’s Asian session started, there was a price channel formed. It was forming more than one whole day. I used my Flexible Volume Profile to look into this area and I discovered that there were pretty massive volumes traded within this channel.
The heaviest volumes were traded at 1.7088. This is the Point Of Control of this rotation area.
From there, the price went into the sell-off.
What does this tell us? This tells us, that there were strong sellers building up their short positions within that rotation area. After they have entered their positions, they pushed the price aggressively downwards.
Big trading institutions need time to enter their positions. That’s why they do it in a rotation, which allows them to do it slowly and without being noticed.
How do we work with this information now? We know there were strong sellers around 1.7088, right? Now, when the price makes it back into this area again, we can expect that those sellers will become active again. If they do, they will start to push the price downwards from this area again.
This is what would make the 1.7088 area a resistance.
What I just showed you is actually my favorite Volume Profile setup. I call it the “Volume Accumulation Setup“.
Price Action setup: Support →Resistance
There is also another thing that supports the idea of the new Resistance around 1.7088.
If you look at the chart below, you can see that the price has already reacted to this area in the past. It made a strong reaction there and bounced upwards. This indicates that it worked as a Support.
Now, when the Support got breached it became a new Resistance. The cool thing about this is that this is exactly at our volume-based level at 1.7088!
I consider this a very nice confluence of two trading setups – the Volume Accumulation Setup, and the Support →Resistance setup.
I hope you guys liked this analysis. Let me know what you think in the comments below!
Happy trading!
-Dale
there were some wild movements on the NZD in the Asian session today. This created some new trading opportunities and in this analysis, I would like to have a look at one of them. This one is on the EUR/NZD.
Volume Profile analysis
Before the strong sell-off in today’s Asian session started, there was a price channel formed. It was forming more than one whole day. I used my Flexible Volume Profile to look into this area and I discovered that there were pretty massive volumes traded within this channel.
The heaviest volumes were traded at 1.7088. This is the Point Of Control of this rotation area.
From there, the price went into the sell-off.
What does this tell us? This tells us, that there were strong sellers building up their short positions within that rotation area. After they have entered their positions, they pushed the price aggressively downwards.
Big trading institutions need time to enter their positions. That’s why they do it in a rotation, which allows them to do it slowly and without being noticed.
How do we work with this information now? We know there were strong sellers around 1.7088, right? Now, when the price makes it back into this area again, we can expect that those sellers will become active again. If they do, they will start to push the price downwards from this area again.
This is what would make the 1.7088 area a resistance.
What I just showed you is actually my favorite Volume Profile setup. I call it the “Volume Accumulation Setup“.
Price Action setup: Support →Resistance
There is also another thing that supports the idea of the new Resistance around 1.7088.
If you look at the chart below, you can see that the price has already reacted to this area in the past. It made a strong reaction there and bounced upwards. This indicates that it worked as a Support.
Now, when the Support got breached it became a new Resistance. The cool thing about this is that this is exactly at our volume-based level at 1.7088!
I consider this a very nice confluence of two trading setups – the Volume Accumulation Setup, and the Support →Resistance setup.
I hope you guys liked this analysis. Let me know what you think in the comments below!
Happy trading!
-Dale
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volumeprofile.com
orderflow.com
đź“ş Free Volume Profile Webinar
trader-dale.com/webinar-how-to-trade-with-volume-profile-in-2022
đź’¬ Have questions?
contact@trader-dale.com
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