medium · Volume Profile Analysis profile-shapes
GBP/USD's weekly composite profile shows a prominent HVN at 1.2720 (the prior week's POC) and a thin LVN at 1.2650-1.2660. Price is currently at 1.2680, trading above the LVN and approaching it from above.
As price falls into the 1.2650-1.2660 LVN zone, what does volume profile theory suggest about expected behavior?
- Price will slow and consolidate within the 1.2650-1.2660 zone because prior volume there was significant
- Price will immediately reverse at 1.2660 and rally back to the HVN at 1.2720 because LVNs always produce sharp reversals
- The LVN at 1.2650-1.2660 will become an HVN during the current visit because any price visit adds to the composite volume
- Price will likely pass quickly through 1.2650-1.2660 toward the next HVN or reference level below, as low prior volume means little structural friction
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