AUD/CHF: Volume Profile and Price Action Analysis

Hello guys,

in my “Weekly Trading Ideas” post from Monday, I was talking about Resistance on AUD/CHF. This Resistance has not been tested yet but there has been a new Support formed on this pair just yesterday!

This Resistance and Support don’t go against each other. They don’t contradict each other. Simply put, when the price reaches the Resistance, then I expect it to go downwards from there. When the price hits the Support I am going to be talking about today, then I expect the price to bounce upwards from it.

So, what is this newly formed Support based on?

Weekly POC = Support

Nothing less than the current Weekly Point Of Control (POC)!

Since Monday, the price has been going upwards. Then yesterday, there was a rotation and massive volumes were traded (accumulated) in this rotation. You can see this with the Volume Profile indicator.

Then the price went up again.

What does this tell us? It tells us, that Buyers who were pushing the price upwards were adding massively to their Long positions around 0.7110. When they were done with that, they pushed the price upwards again.

You can see it all in the picture below.

AUD/CHF; 60 Minute chart; Weekly Volume Profile indicator:

We can work with this information, because now we know where strong Buyers placed a LOT of their Long trades – yea around 0.7110.

As a bonus, this is the place where the heaviest volumes throughout this whole week (so far) were accumulated (= Weekly POC).

When the price makes it back to 0.7110 at some point in the future, then I think it is likely that it will bounce off it and go upwards again.

Why? Because the strong Buyers who were building up their Long positions will want to defend this place. It is an important level for them, because they placed a lot of their positions there.

This is why i think this should work as a strong day trading Support.

This setup is called the “Volume Accumulation Setup“. If you would like to learn more about my Volume Profile trading setups, you can do so for example here:

Volume Profile Trading Setups (WEBINAR RECORDING)

I hope you guys liked today’s analysis! Let me know what you think in the comments below!

Happy trading

-Dale

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