Hi Traders! EURAUD short term forecast update and follow up is here. On January 12th 2021 I shared this “Technical Analysis – EURAUD 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 was moving higher has created a bullish trend pattern in the form of three higher highs, higher lows, we may consider this as evidence of bullish pressure. Generally, after a bullish trend pattern, we may expect corrections and then potential continuation higher. Currently, it looks like a correction is happening. Also, we have two key support zones that has formed, the first key support zone is formed by the 38.2%(1.57417) – 50%(1.57071) Fibonacci retracement levels of the bullish trend pattern and the 100%(1.57118) Fibonacci expansion level of the first wave we have. The second key support zone is formed by the 61.8%(1.56724) Fibonacci retracement level of the bullish trend pattern and the 161.8%(1.56350) Fibonacci expansion level of the first wave we have. Until both these key support zones hold my view remains bullish here.
EURAUD H1(1 Hour) Chart Current Scenario
On the H1 chart, based on the above-mentioned analysis my short-term view was bullish here and I was expecting the price to move higher further until the two key support zones hold. The price action followed my analysis exactly as I expected it to here. The price which was moving lower reached the second key support zone, respected it and then it moved higher further delivering around 200 pips move!
On the M15 chart, the market provided us with various facts supporting the bullish view. The price which was moving lower created a bullish divergence between the first low that has formed at 1.56900 and the second low that has formed at 1.56820 based on the MACD indicator. The price then moved higher and broke above the most recent downtrend line, we may consider these as facts provided by the market supporting the bullish view. Then as you can see in the image below how the price moved higher after that and provided an amazing move to the upside.
(Note: You can learn about a Killer Forex Strategy “Double Trend Line Principle” here)
So, traders, this is why I wanted to show this example to help you understand how important it is to follow the facts. The facts were supporting the bullish view here and there were no signs against it. 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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Happy Trading!
Arvinth Akash
Traders Academy Club Team.
