EUR/CHF: Volume Profile And Price Action Analysis

Hello guys,

today, we are going to have a closer look at EUR/CHF.

Yesterday, I was talking about significant Support there in the Weekly Trading Ideas video. If you missed the video, then you can watch it here:

BITCOIN, EUR/USD,EUR/CHF – NEW Volume Profile Trading Ideas (9th August 2021)

After I have published the video, the EUR/CHF went into another strong trend move.

Volume Profile Setup

So currently, there is a strong uptrend there. What I do when there is an uptrend is that use my Flexible Volume Profile over the whole trend area.

I am interested in the volume distribution there. Mostly in significant volume clusters. Those are heavy volume areas created within the trend.

Such a strong volume cluster is around 1.0762.

What does such a volume cluster tell us? It tells us that strong institutional Buyers who were pushing the price upwards were adding massively to their Long positions there – at the place of the volume cluster.

EUR/CHF; 30 Minute chart:

When there is a pullback to this area, then those strong institutional Buyers should defend this area. This area is important for them, because they have entered a lot of their trading positions there before.

They will defend it by placing Market Orders (=aggressive orders) which help to push the price into a trend again.

This is what will make this area (starting at 1.0762) a strong Support.

The setup I used here is the “Volume Profile: Trend Setup“.

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Price Action Setup

Another nice addition to our volume-based setup is a Price Action setup.

This setup tells us that a breached Resistance becomes a Support.

If you look at the picture below, then you can see that the price reacted nicely to the area around 1.0762 before. Therefore, it worked as a Resistance.

This Resistance got breached yesterday and it then became a Support.

What’s cool about this is that those two setups (Volume Profile and Price Action setups) align nicely together and both point to the same Support around 1.0762

EUR/CHF; 60 Minute chart:

I hope you guys liked my analysis! Let me know what you think in the comments below!

Happy trading,

-Dale

Comments

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