NZD/CHF: Volume Profile 📊 and Price Action Analysis 📋

Hello guys,

there is a nice day trading opportunity on NZD/CHF. Let me show you!

There was a sideways price channel (a rotation) in the late US session yesterday and in today’s Asian session on NZD/CHF.

From this rotation, a strong sell-off (downtrend) started.

A rotation followed by a sell-off is what I like to see. Because this is how my favorite Volume Profile Setup looks like!

Volume Profile Setup
The setup is called the “Volume Accumulation Setup” and it goes like this:

First, you want to see a rotation where heavy volumes got accumulated (you can tell by using a Volume profile indicator). Then you need to see a trend activity – in this case, it is the sell-off.

This tells you that big trading institutions were building up their positions in the rotation area. Then they manipulated the price to go into a sell-off.

This is important because it indicates that it was strong Sellers who were building up their Short positions in that rotation area.

When there is a pullback into that area again, then it is likely that those strong Sellers will want to defend this area. They placed a lot of their positions there and therefore it is important for them.

This is why they should push the price downwards from there again. This makes the area a strong Resistance.

In this case, the Resistance zone is around 0.6567. This is where the volumes were the heaviest.

Price Action Setup
A nice thing about this volume-based Resistance (0.6567) is that there are more independent trading setups that confirm it.

One of them is a Price Action setup called the “Support→Resistance Setup“.

This is super simple setup which says that when a Support gets breached it then becomes a Resistance.

In our case, the 0.6567 area worked as a Support in the past. You can tell because the price bounced nicely off it.

When the price went through that Support earlier today, the Support turned into a new Resistance.

The cool thing is that this resistance is at our volume-based level, that we found using Volume Profile.

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

Happy trading!

-Dale