NZD/USD: Volume Profile and Price Action Market Analysis

Hello guys,

in today’s day trading analysis I will have a closer look at NZD/USD.

Yesterday, there was significant macro news that affected all the USD-related Forex pairs. It was the US CPI and it drove the markets crazy.

One of the pairs it affected was the NZD/USD.

There was a rotation during the whole European session yesterday. But when the news got released the NZD/USD went into a sell-off (downtrend).

Volume Profile Analysis

I used my Flexible Volume Profile to look into that rotation and the trend area. I was interested in how the volumes were distributed there.

The heaviest volumes were traded in the rotation zone – around 0.7230. This is not too surprising as the BIG trading institutions prefer to place their positions in rotation areas like this.

From that place, the price shot downwards (after the macro news).

This tells us that BIG trading institutions were building up their positions in the rotation area. When there was the macro news, those BIG guys pushed (manipulated) the price downwards into the sell-off.

NZD/USD; 30 Minute chart:

0.7230 Resistance

Now we know that strong Sellers placed a lot of their positions around 0.7230. That’s an information we can work with!

When the price makes it back into this rotation area again, it is likely that those strong Sellers will want to defend it.

This area is important for them because they have placed a lot of their orders there. For this reason, I believe that the Sellers will defend it. They will do so by trying to manipulate the price to go downwards again.

They can do this with huge amounts of trading capital placed in the market with Market Orders (aggressive orders that can be used to manipulate prices).

That’s why I think this 0.7230 area will work as a strong Resistance in the future.

The setup I used here is called the “Volume Accumulation Setup” and it is one of my favorite Volume Profile setups.

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

Happy trading,

-Dale

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2 Comments

  1. Chris Bendall

    Thanks for posting. After just starting your course and looking out for significant areas it’s reassuring to know that I am already noticing some of the same areas of potential interest.

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