Hi Traders! EURCAD forecast update and follow up is here. On April 29th I shared this “EURCAD Forecast And Technical Analysis” in this post lets 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 Traders Academy Club. Spoiler alert – free memberships are available!
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Now lets summarize the idea first:
EURCAD D1(Daily) Chart Analysis – Bullish Hidden Divergence, Stochastic Oscillator
On the daily chart we have a bullish hidden divergence that has formed between the first low that has formed on 19th February 2020 and the second low that has formed on 7th April 2020 based on the MACD histogram indicator which we may consider as an evidence of bullish pressure. In addition to this currently, it looks like this hidden bullish divergence is turning into a potential bullish divergence. Also based on the Stochastic Oscillator we could see that the price has reached its extreme which we may consider as another evidence of bullish pressure. We may now move down to one timeframe lower and see if we can find evidences supporting this bullish view.
EURCAD H4 (4 Hours) Chart Analysis – Very Strong Support Zone, Psychological level, Stochastic Oscillator
On the H4 chart we have a strong support zone that has formed based on the fibonacci expansion levels of the first waves of the two bigger cycles and a smaller cycle. The 100% fibonacci expansion level of the first cycle at 1.50071, the 61.8% fibonacci expansion level of the second cycle at 1.50405 and the 61.8% fibonacci expansion level of the smaller cycle at 1.50566 coincides on the same zone with the psychological round number 1.50. We also have an alternative trend line which coincides exactly with this support level which makes this area a very strong support zone for us and the price is nearing this zone. The Stochastic Oscillator has reached its extreme on the H4 chart as well which we may consider as an evidence of bullish pressure. The price has already created a false break, we also have a potential bullish divergence that is forming at the moment. We may now expect the price to create one more false break with the bullish divergence completing itself and then the price to move higher and provide a valid breakout above the most recent downtrend line, we may then expect further continuation higher.
EURCAD H4 (4 Hours) Chart Current Scenario
On the H4 chart, the price moved perfectly as per my analysis. The price moved lower reached the strong support zone, created a false break with bullish divergence. Then the price broke above the most recent downtrend line as expected and then it moved higher further delivering around 400 pips move.
So, traders, this is why I wanted to show this example to help you understand how important it is to follow the facts. When the facts do happen as we expected you can see how the price perfectly moved as per the plan. Because these are the kind of hints the market provides us at majority of the times and it’s our obligation as traders to be able to listen to these things that the market tells us and we should try to make the right actions”.
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To your success,
Vladimir Ribakov
Certified Financial Technician
