NZD/USD: Day Trading Analysis With Volume Profile 📊

Hello guys,

let’s check the NZD/USD today!

There was a pretty wild development after yesterday’s FOMC news. The price first went down after the statement release, but then it turned sharply and a strong buying activity started.

The newly formed uptrend continues until now.

When there is an uptrend I like to look for significant Volume Clusters using Volume Profile. Now, there are three such Volume Clusters in the immediate area. In this analysis, I am going to comment on the one in the middle.

Volume Cluster created within an uptrend usually indicates a place where strong Buyers were adding to their Long positions. Those places are important because those Buyers tend to defend these zones.

So, when the price makes it back into the area where the Volume Cluster got formed (around 0.7109) I expect that there will be a buying reaction = this area should work as a Support.

This setup is called the “Trend Setup“.

Price Action Confluence
If you follow me some time, then you probably know that I really like trading with confluences. Such a confluence is when two or more trading setups point to the same trading Support/Resistance.

In this case, there is also such a confluence.

The second trading setup which points to the 0.7109 support is a Price Action setup called “Resistance →Support“.

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

If you look at the chart below, you can see that the price has already reacted around the 0.7109 zone in the past and that this zone worked as a Resistance. Today, the Resistance got breached and it turned into a Support.

The cool thing is that this happened around our Volume Profile level – that’s the confluence of two setups I am talking about!

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

Happy trading!

-Dale