Hi Traders! AUDCAD forecast follow up and update is here. On February 25th I shared this “AUDCAD Forecast And Technical Analysis” 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!
My Idea
On the daily chart, we have a key resistance zone that has formed by the 161.8% (1.00608) Fibonacci expansion level of the first wave and the 61.8%(0.99945) Fibonacci expansion level of the second wave. The price which is moving higher has currently reached this key resistance zone. In addition to this, we have a bearish divergence that has formed between the first high that has formed on 7th January 2021 and the second high that has formed on 22nd February 2021 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 its extreme here as well, we may consider this as yet another evidence of bearish pressure. Until the key resistance zone holds my view remains bearish here and I expect the price to move lower further.
Based on the above-mentioned analysis my view was bearish here and I was expecting the price to move lower further until the key resistance zone holds. The price action followed my analysis exactly as I expected it to and moved lower further delivering around 200+ pips move so far.
The market provided us with various facts supporting the bearish view on the H1 chart. We had a bearish divergence that had formed between the first high that has formed on 22nd February 2021 and the second high that has formed on 25th February 2021 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, also there were no signs opposing this bearish view. Then as you can see in the screenshot 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)
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 bearish 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.
(Note: You can follow us here on Trading View and also on our blog to get similar ideas on a daily basis)
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Happy Trading!
Yordan Kuzmanov
Chief Trader at the Traders Academy Club
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