Hi Traders! NZDJPY short term forecast follow up and update is here. On April 25th, 2024 I shared this “NZDJPY Short Term Forecast And Technical Analysis” 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 H4 chart, the price which was moving lower reached a strong support zone respected it and bounced higher from this zone. The price then moved higher and has broken above the most recent downtrend line, which we may consider as evidence of bullish pressure. In addition to this, we could see that the price has created a bullish divergence formed between the first low formed at 90.485 and the second low formed at 89.937 based on the MACD indicator. The price then moved higher and broke above the last high at 91.596 creating higher highs, thus forming a classical setup of bullish divergence followed by bullish convergence, we may consider these as other evidences of bullish pressure. In addition to this, the ADX indicator gave a bullish signal here, at the cross of +DI (green line) versus -DI (red line) and the main signal line (silver line) reads a value over 25, we may consider this as yet another evidence of bullish pressure. Also, 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. So based on all this, until the strong support zone shown in the image below (marked in green) holds my short-term view remains bullish here and I expect the price to move higher further after pullbacks.
NZDJPY H4(4 Hours) Chart Current Scenario
On the H4 chart, based on the above-mentioned analysis my short-term view was bullish here and I was expecting the price to move higher further after pullbacks until the strong support zone holds. The price action followed my analysis exactly as I expected it to here. After the bullish convergence, the pullback that I was looking for happened and the price which was moving lower reached the strong support zone, respected it and bounced higher from this zone. The price then moved higher further as I expected it and delivered 600+ pips move to the upside!
On the H1 chart, the market provided us with various facts supporting the bullish view. The price which was moving lower created a bullish divergence between the first low that has formed at 92.185 and the second low that has formed at 90.760 based on the MACD indicator. The price then moved higher and broke above the most recent downtrend line, we may consider these as facts provided by the market supporting the bullish view. Then as you can see in the image below how the price moved higher after that and provided an amazing move to the upside!
As traders we always have two choices, the first one is to fall in love with our analysis and try to convince the market and expect the price to move in the direction as per our wish. The second one is to follow the facts that the market provides us and make the right actions according to that. As you know the first option won’t help us and as you can see in the example above what happened when we followed the facts that the market hinted to us and took the right action according to that.
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Happy Trading!
Arvinth Akash
Home Trader Club Team.
