EUR/NZD: A Simple Volume Profile Analysis

Hello guys,

today I would like to show you a nice day trading Support on EUR/NZD.

In this case, the analysis is pretty simple as the Support is based only on one trading setup and not on more (as opposed to yesterday’s analysis where I used three setups together).

Volume Profile – Trend Setup

EUR/NZD has been in an uptrend since the start of this week. When there is an uptrend I am always interested in how the volumes were distributed there – in the trend.

For this, I like to use my Volume Profile indicator.

In this case, it shows a really strong volume area that got created around the middle of the uptrend. In fact, this heavy volume area is this week’s Point Of Control (POC) – which means that the heaviest volumes in this week got traded there.

When there is a significant volume area within a trend, then I call it a “Volume Cluster“.

Volume Clusters are significant places because they point us to the most important areas in the trend – areas where the big guys (big trading institutions) were trading the most.

EUR/NZD; 60 Minute chart:

In the picture above you can see that the heaviest volumes in the Volume Cluster got traded around 1.6825. This tells us that strong Buyers who are pushing the price upwards were adding to their Long positions massively there. This zone is now very important for them because they placed a lot of their volumes (positions) there.

Wait For A Pullback

When the price makes it back into this area again then those Buyers are likely to defend this zone. It is important for them.

They will defend it by placing Market Buy orders which should manipulate the price to go up again.

This is why I think this 1.6825 zone will work as a strong Support when the price reaches it at some point in the future.

The setup is one of my favorite Volume Profile setups. It is called the “Trend Setup” because I trade it when there is a trend.

I hope you guys liked this analysis. Let me know what you think in the comments below!

Happy trading!

-Dale

P.S. On tuesday I published a video where I presented two very good brokers. If you missed it, you can watch it below:

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