NZD/USD: Volume Profile and Price Action Day Trading Analysis

Hello guys,

there has been a really nice action on all the USD-related pairs during and after yesterday’s Powell speech (FED chair). USD strengthened all across the board and made new and nice trading opportunities.

One of them is on NZD/USD.

Before the speech, there was a rotation on NZD/USD. Such rotations serve the BIG guys (big trading institutions) well because they can hide their trading activity there.

What they usually do is enter their big trading positions slowly and unnoticed in such rotations and then they push the price into a strong trend.

In this case, I think that strong Sellers were building up their Short positions in a rotation, and from there they pushed the price into a new sell-off.

Volume Profile Analysis

If you use my Flexible Volume Profile indicator on the NZD/USD chart, you will see massive volumes were traded in that rotation that took place before the speech.

Then there was the speech and the BIG guys pushed the price downwards.

You can see it on the picture below.

NZD/USD; 30 Minute chart:

Now we know, that huge Short positions were traded in the rotation around 0.7249. Actually, this area is also a place where the heavies volumes in this week were traded! Weekly Point Of Control (POC).

This is an information we can work with! Now we know where interests of strong sellers are!

The zone around 0.7249 is very important for them, since they placed a LOT of their short positions there.

When the price makes it back to this zone again, those strong Sellers will most likely defend it. It is an important place for them – they placed a lot of their positions there.

Because of that, they should try and push the price downwards from this place again.

This is why the area around 0.7249 should work as a Resistance zone.

This setup is one of my favorite trading setups, and it is called the “Volume Accumulation Setup“.

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EUR/USD Swing Short

BTW this recent strengthening of USD pushed the EUR/USD into a new sell-off too. It is now getting close to our Take Profit (+450 pips) – a trading opportunity I wrote about earlier here:

+450 pip Short trade opportunity on EUR/USD

Let me know what you guys think about this in the comments below!

Have a GREAT weekend and happy trading!

-Dale

P.S. Be careful, there is a strong macroeconomic news coming up later today (NFP and unemployment report from the US). Day trading during and immediately after such news is EXTREMELY RISKY!

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