EUR/CAD: How To Combine Volume Profile 📊

In my yesterday’s Weekly Trading Ideas video I was talking about a strong resistance on EUR/CAD. The price has already reacted to this resistance and those who took this trade had a nice profit.

What I want to show you now is how you could have used VWAP ho get the best out of this trade.

The first thing to notice is the 1st deviation of Weekly VWAP. That’s the grey line. In this case it represents a good resistance (this is based on a trading setup I talked about in this VWAP webinar: VWAP Trading Strategies).

Combined with heavy volumes I talked about yesterday (marked in red) it made a nice confluence of two strong resistances (volumes + VWAP deviation).

New Support on EUR/CAD
Now, I would like to continue with the EUR/CAD analysis and talk about a newly formed intraday support.

If you look at what the Volume Profile showed yesterday, then you can see that there was a “double distribution” shape (looks like a capital letter B).

This means that heavy volumes were accumulated at the low of the day, and then the price went upwards. Then there were heavy volumes accumulated at the end of the day (high of the day).

This tells me that strong buyers were building up their buying positions, then they moved the price upwards and then there was a new balance (new fair value area).

What happens when the price makes it back to the heavy volume area at the bottom of all this? Those buyers who entered their positions there will most likely start defending those positions. They will start entering aggressive market buy orders. With those they will try to move the price upwards again.

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

Happy trading!

-Dale