Hi Traders! Today I am sharing with you my AUDCAD technical analysis and forecast post. The way I would like to analyze the chart for setups is based on multi-timeframe confirmations because in my POV if we get more evidences on different timeframes for the same direction then it makes the setup much more reliable. We do our analysis on the MetaTrader4 platform (MT4), some very interesting, useful tips and hacks about the MT4 platform could be found here. If you would like to learn more about the way we trade and the technical analysis we use then check out the Traders Academy Club Spoiler alert – free memberships are available! Now, let’s start our analysis from the highest timeframe which will be the daily chart here.
AUDCAD D1(Daily) Chart Analysis – Key Resistance Zone, Heikin Ashi Candles, Bearish Convergence, ADX Indicator
On the daily chart, the price which was moving higher reached a key resistance zone formed by the 61.8%(0.95054)Fibonacci expansion level of the first wave. The price respected this key resistance zone and bounced lower from this zone. In addition to this, based on the Heikin Ashi candles we can see that currently, we have strong bearish bodies in downward moving market conditions so it basically reflects a bearish environment. Also, we could see that the price which was moving higher has created a bearish divergence between the first high that has formed at 0.94616 and the second high that has formed at 0.95153 based on the MACD indicator. The price then moved lower and broke below the last low at 0.91630 creating lower lows, thus forming a classical setup of bearish divergence followed by bearish convergence, we may consider these as evidences of bearish pressure. Generally, after a bearish convergence we may look for corrections and then further continuation lower. In addition to this, the ADX indicator gave a bearish signal here at the cross of -DI (red line) versus +DI (green line) and the main signal line (silver line) reads value over 25 which we may consider as yet another evidence of bearish pressure. So everything looks good here for the bears and we may now move down to lower timeframe and look for evidences supporting this bearish view.
AUDCAD H4(4 Hours) Chart Analysis – Heikin Ashi Candles, Bearish Trend Pattern, Two Key Resistance Zones
On the H4 chart, based on the Heikin Ashi candles we can see that currently, we have strong bearish bodies in downward moving market conditions here as well, so it basically reflects a bearish environment. In addition to this, the price which is moving lower has created a bearish trend pattern in the form of three lower highs, lower lows which we may consider as evidence of bearish pressure. Generally, after a bearish trend pattern, we may expect corrections and then further continuation lower. Currently it looks like a correction is happening. Also, while measuring this bearish trend pattern using the Fibonacci retracement tool we have two key resistance zones that has formed. The first key resistance zone is formed by the 23.8%(0.91920) and 38.2%(0.92538) Fibonacci retracement zones of the bearish trend pattern. The second key resistance zone is formed by the 50%(0.93037) and 61.8%(0.93536) Fibonacci retracement zones of the bearish trend pattern. Until these two key resistance zones hold my view remains bearish here and I expect the price to move lower further.
Technical Analysis & Forecast Summary
AUDCAD D1(Daily) Chart Analysis
- Key Resistance Zone, Heikin Ashi Candles, Bearish Convergence, ADX Indicator
AUDCAD H4(4 Hours) Chart Analysis
- Heikin Ashi Candles, Bearish Trend Pattern, Two Key Resistance Zones
Trading Tips
It is always recommended to look for confirmations before you jump into any trade. If you are not sure about how to trade this sell setup then you can use any setup and strategy that you have in your arsenal to look for bearish moves and join this sell trade.
Also, don’t forget to protect your sell trade using a stop loss and make sure to set a target and keep a proper risk/reward ratio.
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Happy Trading!
Arvinth Akash
Traders Academy Club Team.
