This is a sister thread to the London session market profile prep.
Please refer to that thread for a description of the methodology.
Here in this thread, we look at several major Forex pairs.
The major differences between profiles of the Forex instruments and those of the equity indices are the nature of the auctions.
The equity indices are strongly driven by the sentiment, i.e. risk on risk off. That is why everyday is pretty much a new auction. Hence, daily profiles are very effective. The weekly profile can also be consulted for guidance. However, the monthly and yearly profile are much less useful for indices.
On the other hand, the auction of the Forex are driven by the macro factors such as the interest differentials, central bank flows and so on, the auction there is much stickier in nature. Hence the weekly, monthly and yearly profile are quite useful, while the daily profile levels are not often respected.
See in this example where Gold has repeatedly find support at the level 1313.8. Why? It is the Value area high of last year's profile. That is the location where the big moneys are step in initiating trades.
In the second example, the Aussie got a strong rejection at 0.7914, which is the Value area high of the Feb monthly TPO. The responsive seller stepped in driving Aussie lower.
Please refer to that thread for a description of the methodology.
Here in this thread, we look at several major Forex pairs.
The major differences between profiles of the Forex instruments and those of the equity indices are the nature of the auctions.
The equity indices are strongly driven by the sentiment, i.e. risk on risk off. That is why everyday is pretty much a new auction. Hence, daily profiles are very effective. The weekly profile can also be consulted for guidance. However, the monthly and yearly profile are much less useful for indices.
On the other hand, the auction of the Forex are driven by the macro factors such as the interest differentials, central bank flows and so on, the auction there is much stickier in nature. Hence the weekly, monthly and yearly profile are quite useful, while the daily profile levels are not often respected.
See in this example where Gold has repeatedly find support at the level 1313.8. Why? It is the Value area high of last year's profile. That is the location where the big moneys are step in initiating trades.
In the second example, the Aussie got a strong rejection at 0.7914, which is the Value area high of the Feb monthly TPO. The responsive seller stepped in driving Aussie lower.