Hi Traders! EURCAD short term forecast update and follow up is here. On January 25th, 2024 I shared this “EURCAD Technical Analysis And Short Term Forecast” post in our blog. In this post, let’s do a recap of this setup and see how it has developed now. If you would like to learn more about the way we trade and the technical analysis we use then check out the Home Trader Club. Spoiler alert – free memberships are available!
My Idea
On the H1 chart, based on the Heikin Ashi candles we can see that currently, we have strong bullish bodies in upward moving market conditions so it basically reflects a bullish environment. Also, the price which is moving higher has created a bullish trend pattern here as well in the form of three higher highs, higher lows, we may consider this as another evidence of bullish pressure. Generally, after a bullish trend pattern, we may expect corrections and then potential continuation higher, currently it looks like a correction is happening. In addition to this, the ADX indicator gave a bullish signal here as well at the cross of +DI (green line) versus -DI (red line) and the main signal line (silver line) reads value over 25, we may consider this as yet another evidence of bullish pressure. So everything looks good here as well for the bulls and until the strong support zone (marked in green) shown in the image below holds my short-term view remains bullish here and I expect the price to move higher further after pullbacks.
EURCAD H1(1 Hour) Current Scenario
Based on the above-mentioned analysis my short-term view was bullish here and until the strong support zone holds I was expecting the price to move higher further after pullbacks. The price action didn’t follow my analysis here and this idea failed. After the bullish trend pattern, the price which was moving lower reached the strong support zone but the price didn’t hold in this zone as I expected it to. The price moved lower further and we got a valid breakout below this strong support zone thus invalidating the bullish view here. My current view on EURCAD is neutral.
So traders, this is why I wanted to show this example to help you understand why we should always trade based on the facts and hints provided by the market and take the right actions according to that. Even though we had various facts supporting the bullish view, the price didn’t hold in the support zone as I expected it to and broke below it, which is a contradictory sign provided by the market opposing the bullish view. Also, you should keep in mind that losses are part of trading we can’t expect every trade to go as per our plan and provide us profits. In trading, we can’t avoid losses but in order to be successful in trading, we should know how to cut losses early and how to manage the trade when the price goes in the opposite direction.
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Happy Trading!
Arvinth Akash
Home Trader Club Team.
