easy · 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?

  1. Price will slow and pause to build acceptance inside the 1.2650-1.2660 zone, since the prior volume transacted there was structurally significant
  2. Price will reverse hard right at 1.2660 and rally straight back to the prior-week HVN at 1.2720, because thin LVN zones reliably produce sharp V-reversals
  3. The 1.2650-1.2660 LVN will convert into a fresh HVN on this single visit, since every brief price pass meaningfully adds to the running composite volume tally
  4. 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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