USD/CHF: Day Trading Analysis with Volume Profile

In this analysis, I am going to have a look at USD/CHF. There has been a nice trend development and strong selling activity just recently.

When there is such a downtrend I use my Flexible Volume Profile tool to identify significant volume clusters (areas with heavy volumes).

Those volume clusters represent places where sellers were adding to their short positions to push the price even lower.

Volume Profile Setup

The closest volume cluster on USD/CHF is around 0.9156 (this is the POC of the volume cluster)

As the sellers were pushing the price downwards in the downtrend, they were adding to their shorts around 0.9156. From there, they pushed the price even lower into an aggressive sell-off.

When the price makes it back into this heavy volume area, I think that those sellers will want to defend their short positions and to push the price downwards from there again.

That’s why I think the 0.9156 will work as a strong intraday resistance.

USD/CHF, 30 Minute chart:

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Support → Resistance

My favorite Price Action setup that I use every day in my trading is called “Support becoming Resistance (and vice versa)“.

When a former support is breached and the price goes below it, it then becomes a resistance.

I really like to combine this setup with my volume-based setups that I trade with Volume Profile.

In this case, the price bounced of the 0.9156 area (this zone generally, not exactly) which tells me that it was a strong support in the past.

Then, as the price went past this zone, the support failed and turned into a resistance.

This Price Action resistance nicely aligns with our Volume-based resistance. This is the sort of two-setup confluence I like to trade.

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

Have a GREAT weekend and happy trading!

-Dale

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