Hi Traders! AUDCAD forecast follow up and update is here. On October 12th I shared this “AUDCAD 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
On the H4 chart, we have a key support zone that has formed based on the 161.8% Fibonacci expansion level of the first wave and the 61.8% Fibonacci expansion level of the second wave. The price which was moving lower, reached this zone, respected it and is bouncing higher from this zone. In addition to this, we have a bullish divergence that has formed between the first low that has formed at 0.91708 and the second low that has formed at 0.91033 based on the MACD indicator, we may consider this as evidence of bullish pressure. Also, the ADX indicator gave a bullish signal here at the cross of +DI (green line) versus -DI (red line) and the main signal line (silver line) reads value over 25, we may consider this as another evidence of bullish pressure. In addition to this, based on the Parabolic Sar the dots are below the price here as well, which we may consider as yet another evidence of bullish pressure. Until the key support zone holds my view remains bullish here. If we get a valid breakout above the high at 0.92097 we may then consider it as a validation for the bullish view and may expect the price to move higher further.
AUDCAD H4(4 Hours) Chart Current Scenario
In this pair based on the above-mentioned analysis, my view was bullish and I was expecting the price to move higher further until the key support zone holds. Also, I mentioned that “if we get a valid breakout above the high at 0.92097 we may then consider it as a validation for the bullish view and may expect the price to move higher further”. The price action followed my analysis exactly as I expected it to here. The validation for the bullish view which is a valid breakout above the high at 0.92097 happened as I expected it to. The price then moved higher further and delivered 120+ pips move until it was blocked by a bearish divergence.
On the H1 chart, the market provided us with various facts supporting the bullish view. After the breakout of the high at 0.92097 on the H4 chart, we had a pullback and this pullback happened in the form of an ABCD pattern on the H1 chart. The price created a false break of the low at 0.92214 and then it moved higher and broke above the most recent downtrend line. We may consider these as facts provided by the market supporting the bullish view and also there were no signs opposing this bullish view. Then as you can see in the image below how the price moved higher after that and provided a nice move to the upside.
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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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If you have any further questions, don’t hesitate to drop a comment below!
Happy Trading!
Arvinth Akash
Traders Academy Club Team.
