Hi Traders! EURNZD forecast update and follow up is here. On August 26th I shared this EURNZD Technical Analysis And Forecast post in my 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 Traders Academy Club. Spoiler alert – free memberships are available!
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Now let’s summarize the idea first:
On the H1 chart, the price has created a bearish trend pattern in the form of three lower highs, lower lows which we may consider as evidence of bearish pressure. Also, the ADX indicator gave a bearish signal here as well at the cross of -DI (red line) versus +DI (green line), and the main signal line (silver line) reads value over 25, we may consider these as another evidence of bearish pressure.
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, so until the condition changes my view remains bearish here.
EURNZD H1(1 Hour) Chart Current Scenario
Based on the above-mentioned analysis my view was bearish here and I was expecting the price to continue lower further after the bearish trend pattern. There were no contradictory signs and also based on the Heikin Ashi candles the bearish environment didn’t change and we had strong bearish bodies. We may consider these as facts provided by the market supporting the bearish view. The price action followed my analysis and moved lower as I expected it to delivering 180+ pips move so far.
Currently, on the H1 chart, we have a potential bullish divergence that is forming at the moment, this is something that we need to pay attention to. As I always suggest when you see contradictory signs like this, then you should consider managing your trade and secure your profits (cash out or partial cash out or trailing protections or partial hedge, etc.. depending on the strategy that you work with).
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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 us and took the right action according to that.
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To your success,
Vladimir Ribakov
Certified Financial Technician
