Hi Traders! EURAUD short term forecast follow up and update is here. On December 15th 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 H4 chart, currently it looks like the correction is happening in the form of double wave down. We have the first leg down followed by a correction with the price reaching a strong resistance zone, respected it and is currently bouncing lower from this zone. Also, we have a key support zone that has formed by the 61.8%(1.56244) Fibonacci expansion level of the first wave of this correction and the 61.8%(1.56679) Fibonacci retracement level of the big bullish move. The price still has room lower towards this key support zone and in addition to this there are no signs opposing this short term bearish view at the moment. So basically, until the strong resistance zone holds I expect the price to move lower in the short term at least towards the key support zone.
EURAUD H4(4 Hours) Chart Current Scenario
Based on the above-mentioned analysis my short term view was bearish here and I was expecting the price to move lower further towards the key support zone until the strong resistance zone holds. The short term bearish move happened exactly as I expected it to here, the price moved lower further and reached the key support zone delivering around 170+ pips move. The price then moved higher and reached the strong resistance zone, respected it and then it bounced lower again from this zone. We also had a breakout of the most recent uptrend line which we may consider as evidence of bearish pressure. The price then moved lower further and has delivered 340+ pips move!
(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 to us and took the right action accordingly.
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Happy Trading!
Arvinth Akash
Traders Academy Club Team
