Hi Traders! EURAUD short term forecast follow up and update is here. On November 30th I shared this “EURAUD 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 Traders Academy Club. Spoiler alert – free memberships are available!
My Idea
Looking at the H1 chart, we could see that the price which is moving higher has created a bearish divergence between the first high that has formed at 1.59119 and the second high that has formed at 1.59704 based on the MACD indicator, which we may consider as evidence of bearish pressure. Also, based on the Stochastic Oscillator we could see that the price has reached it’s extreme here as well, which we may consider as yet another evidence of bearish pressure. In addition to this, currently there are no signs opposing this short term bearish view. So based on all this, until the key resistance zone shown in the image below (marked in red) holds my short term view remains bearish here.
EURAUD H1(1 Hour) Chart Current Scenario
In this pair, on the H1 chart, based on the above-mentioned analysis my short term view was bearish here and I was expecting the price to move lower further. The short term bearish move happened exactly as I expected it to here, the price respected the strong resistance zone and then it moved lower delivering around 150 pips move before the price moved higher again.
On the M15 chart, the market provided us with various facts supporting this short term bearish view. The price which was moving higher has created a false break with bearish divergence between the first high that has formed at 1.59482 and the second high that has formed at 1.59704 based on the MACD indicator. The price then moved lower and broke below the last low, we may consider these as facts provided by the market supporting the bearish view. We then had a pullback and then the price moved lower further as I expected it to and delivered a nice move to the downside!
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 accordingly.
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Happy Trading!
Arvinth Akash
Traders Academy Club Team
