Intraday analysis of CHF/JPY 😷
How to Use Order Flow on Forex
Today, I will do an intraday analysis of CHF/JPY. It will be a bit different this time because I will also use Order Flow.
Let’s first talk about what the Price Action and Volume Profile show.
There has been a strong downtrend since the beginning of this week. There haven’t been any major pullbacks and the price has been heading downwards steadily.
Volume Profile analysis
When there is a trend like this I like to use my Volume Profile to look in that trend area. What I look for are significant Volume Clusters (areas where heavy volumes were traded).
The reason CHF/JPY caught my eye today was because there are THREE Volume Clusters! Three very nicely visible and easy to identify heavy volume areas.
I believe that the volumes we see in those three areas were aggressive sellers, who were adding to their selling positions.
After each volume accumulation, those sellers pushed the price aggressively downwards – to make money on those positions they have entered in the Volume Cluster areas.
Those Volume Clusters now represent significant resistance zones. If there is no change in the market sentiment those zones should hold and reverse the price (when there is a pullback).
Logic behind Volume Clusters
The logic behind this is that the sellers who have entered their short positions in those Volume Clusters will want to defend their shorts. And if there is a pullback, then those guys are most likely to start selling and pushing the price downwards again. That’s why I think those three areas will work as resistances.
You can see all that in the screenshot below. It shows 30 Minute chart of CHF/JPY along with those three resistances
I hope you guys liked today’s analysis! Let me know what you think in the comments below!
Stay safe and happy trading!
-Dale
Today, I will do an intraday analysis of CHF/JPY. It will be a bit different this time because I will also use Order Flow.
Let’s first talk about what the Price Action and Volume Profile show.
There has been a strong downtrend since the beginning of this week. There haven’t been any major pullbacks and the price has been heading downwards steadily.
Volume Profile analysis
When there is a trend like this I like to use my Volume Profile to look in that trend area. What I look for are significant Volume Clusters (areas where heavy volumes were traded).
The reason CHF/JPY caught my eye today was because there are THREE Volume Clusters! Three very nicely visible and easy to identify heavy volume areas.
I believe that the volumes we see in those three areas were aggressive sellers, who were adding to their selling positions.
After each volume accumulation, those sellers pushed the price aggressively downwards – to make money on those positions they have entered in the Volume Cluster areas.
Those Volume Clusters now represent significant resistance zones. If there is no change in the market sentiment those zones should hold and reverse the price (when there is a pullback).
Logic behind Volume Clusters
The logic behind this is that the sellers who have entered their short positions in those Volume Clusters will want to defend their shorts. And if there is a pullback, then those guys are most likely to start selling and pushing the price downwards again. That’s why I think those three areas will work as resistances.
You can see all that in the screenshot below. It shows 30 Minute chart of CHF/JPY along with those three resistances
I hope you guys liked today’s analysis! Let me know what you think in the comments below!
Stay safe and happy trading!
-Dale
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