Hi Traders! Today I am sharing with you the AUDCAD short term forecast and technical analysis post. We do our analysis on the MetaTrader4 platform (MT4). Some very interesting, useful tips and hacks about the MT4 platform could be found here. If you would like to learn more about the way we trade and the technical analysis we use then check out the Home Trader Club Spoiler alert – free memberships are available!
AUDCAD D1(Daily) Chart Analysis – Bearish Divergence, ADX Indicator, Key Support Zone
On the daily chart, we have a continuing bearish divergence that has formed between the first high that has formed at 0.90152 and the second high that has formed at 0.93306 based on the MACD indicator which we may consider as evidence of bearish pressure. In addition to this, the ADX indicator gave a bearish signal here at the cross of -DI (red line) versus +DI (green line) and the main signal line (silver line) reads a value over 25 which we may consider another evidence of bearish pressure. Currently, it looks like a correction is happening and the price still has room lower toward the key support zone formed by the 38.2%(0.90515) – 50%(0.89653) Fibonacci retracement levels of the bullish rally. So everything looks good here for the bears and we may now move down to one timeframe lower and look for evidence supporting this short-term bearish view.
AUDCAD H4(4 Hours) Chart Analysis – Bearish Convergence
Looking at the H4 chart, we could see that the price which was moving higher has created a bearish divergence between the first high that formed at 0.92774 and the second high that formed at 0.93306 based on the MACD indicator. The price then moved lower and broke below the last low at 0.91906 creating lower lows, thus forming a classical setup of bearish divergence followed by bearish convergence, we may consider these as evidence of bearish pressure. Generally, after a bearish convergence, we may look for corrections and then a further continuation lower. Currently, it looks like a correction is happening. So based on all this, until the strong resistance zone (marked in red) shown in the image below holds my short-term view remains bearish here and I expect the price to move lower further after pullbacks.
Technical Analysis & Forecast Summary
AUDCAD D1(Daily) Chart Analysis
- Bearish Divergence, ADX Indicator, Key Support Zone
AUDCAD H4(4 Hours) Chart Analysis
- Bearish Convergence
Trading Tips
It is always recommended to look for confirmations before you jump into any trade. If you are not sure about how to trade this short-term sell setup then you can use any setup and strategy that you have in your arsenal to look for bearish moves and join this sell trade.
Also, don’t forget to protect your sell trade using a stop loss and make sure to set a target and keep a proper risk/reward ratio.
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Happy Trading!
Arvinth Akash
Traders Academy Club Team
