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NZD/CHF: Swing Trading Analysis With Volume Profile and Price Action

 

Hello guys,

today I would like to share my thoughts on NZD/CHF from the longer time frame perspective. So, today’s analysis will be a “swing” trade analysis and I will be using a Daily time frame.

What I found interesting about the NZD/CHF was a very sharp price reversal.

There was a strong sell-off lasting 6 days, but then the price has suddenly turned and there was a strong buying activity. The price was rising for 11 consecutive days which is quite a lot!

What I am interested in the most is the place where the price turned (reversed) from sell-off into the buying rally.

NZD/CHF; Daily chart:

Volume Profile Analysis

I used my Volume Profile indicator to look into the whole rejection area to see how volumes were distributed there.

What I was looking for was an important volume zone somewhere around the place where the price reversed.

As you can see from the picture above, I found that zone (blue rectangle). This is the most important place in the “rejection”.

The reason is that it is very close to that place where the price reversed, and also that heavy volumes were traded there.

What do those volumes mean though? They point to the place where the Sellers fought the Buyers. It is the place where the aggressive Buyers placed most of their Long positions.

This is the most important area for those Buyers. It’s not the swing low – as many beginner traders often think. It is the area where the buyers placed most of their volumes!

NZD/CHF; 0.6282 Support

When the price makes it back into this area again (starting around 0.6282), then those strong buyers will most likely defend this place again. It is clearly important for them as they were aggressively defending it in the past.

That’s why I expect this zone to work as a strong swing trading Support.

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

If you would like to learn more about Swing trading, then you can watch this webinar:

WEBINAR: Swing Trading With Volume Profile

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

Happy trading,

-Dale

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