AUD/NZD Volume Profile Analysis

Identify the Trend
The first thing to do is to identify whether there is a rotation or a trend. In this case it is pretty simple. The 1st VWAP deviation (Weekly VWAP) is moving upwards. This means that the price and volumes are shifting upwards and that there is an uptrend.

In this case you could also tell by just looking at the price action without using the VWAP. Sometimes it is not so clear as here though…

Volume Profile analysis
Let’s now have a look some more into the volume distribution in this trend area.

I used my Flexible Volume Profile to the whole trend area to identify places where significant volumes were traded.

There are two significant volume areas visible. The first one (around 1.0580) corresponds with the support from the VWAP Trend setup (the picture above).

As the price was moving upwards, buyers were adding to their long positions in those heavy volume areas.

It is likely that when there is a pullback into those heavy volume areas, buyers will want to defend their longs and they will try to push the price upwards from those areas again.

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

Stay safe and happy trading!

-Dale