Hi Traders! EURNZD short term forecast follow up and update is here. On November 9th I shared this “EURNZD 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 Traders Academy Club. Spoiler alert – free memberships are available!
My Idea
Looking at the H4 chart, we could see that the price which was moving higher has created a bearish divergence between the first high that has formed at 1.63186 and the second high that has formed at 1.63259 based on the MACD indicator. The price then moved lower and broke below the last low at 1.61778 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. Currently, it looks like a correction is happening. In addition to this, based on the Stochastic Oscillator we could see that the price has reached its extreme which we may consider as yet another evidence of bearish pressure. Until the strong resistance zone shown in the image below holds my short term view remains bearish here and I expect the price to move lower further.
EURNZD H4(4 Hours) Chart Current Scenario
In this pair, based on the above-mentioned analysis my short term view was bearish and I was expecting the price to move lower further until the strong resistance zone holds. After the bearish convergence the price which was moving higher broke above the last high but it was still holding in the strong resistance zone. The price respected this zone and then it moved lower as I expected it to and has delivered around 250 pips move so far.
On the H1 chart, the market provided us with various facts supporting the bearish view. The price which was moving higher created a bearish divergence between the first high that has formed at 1.63111 and the second high that has formed at 1.63518 based on the MACD indicator. The price then moved lower and broke below the most recent uptrend line. We may consider these as facts provided by the market supporting the bearish view and also there we no signs opposing this bearish view. Then as you can see in the image below how the price moved lower further and provided a fantastic move to the downside.
(Note: You can learn about a Killer Forex Strategy “Double Trend Line Principle” here)
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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If you have any further questions, don’t hesitate to drop a comment below!
Happy Trading!
Arvinth Akash
Traders Academy Club Team
