EUR/AUD: Volume Profile And Price Action Analysis

Hello guys,

today I would like to have a closer look at the EUR/AUD.

Rotation And A Trend

If you look at simple Price Action then you can see there was a price channel starting 7th September and lasting until today.

What happened in today’s Asian session was that the price broke out of this channel. It seems a new uptrend has started.

Before almost every new trend, there is always a rotation or a price channel. Why? Because the BIG trading institutions who move and manipulate the markets have insane amounts of money which they need to allocate before the trend starts.

They enter their trading positions slowly and unnoticed in rotation zones – just like the one on EUR/AUD.

Volume Profile Analysis

Let’s now have a look at the picture below. What does it tell us? There was a rotation with heavy volumes accumulated there (BIG trading positions being entered). You can see that if you use my Volume Profile tool.

Then, a new uptrend started. This indicates that strong institutional Buyers were building up their Long positions inside the rotation and then manipulating the price into the new trend.

EUR/AUD, 60 Minute chart; Weekly Volume Profile:

Now, we know that there were strong Buyers in that rotation. It is pretty likely that those Buyers will want to defend the place where they were entering their Longs before.This place was clearly important for them.

This is why I think that the zone starting around 1.6039 will work as a strong day trading Support.

The Volume Profile setup I used here is called the “Volume Accumulation Setup“

Weekly Point Of Control (POC)

If you look at the picture again, you can see that the heavy volume area was actually a Weekly Point Of Control (POC). This means the heaviest Volumes throughout the previous (and this) week were traded there.

Volume-wise, this is the most important area in the whole chart right now.

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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