Hi Traders! Today I am sharing with you the AUDCAD short term forecast and technical analysis post. The way I would like to analyze the chart for setups is based on multi-timeframe confirmations because in my POV if we get more evidences on different timeframes for the same direction then it makes the setup much more reliable. 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! Now, let’s start our analysis from the highest timeframe which will be the daily chart here.
AUDCAD D1(Daily) Chart Analysis – Bearish Divergence, Parabolic Sar, Key Support Zone
On the daily chart, we have a 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 indicatorwhich we may consider as evidence of bearish pressure. In addition to this, based on the Parabolic Sar, we could see that the dots are above the price which we may consider as yet 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%(0.91853) – 50%(0.90733) Fibonacci retracement levels of the bullish rally. So everything looks good here for the bears and we may now move down to lower timeframe and look for evidence supporting this short-term bearish view.
AUDCAD H1(1 Hour) Chart Analysis – Bearish Trend Pattern, ADX Indicator, Two Strong Resistance Zones
On the H1 chart, the price which is moving lower has created a bearish trend pattern in the form of three lower highs, and lower lows which we may consider as evidence of bearish pressure. Generally, after a bearish trend pattern, we may expect corrections and then a further continuation lower. Currently, it looks like a correction is happening. 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 as yet another evidence of bearish pressure. Also, we had two strong support zones that have formed and the price which was moving lower has broken below these zones and is holding below them, we may consider this as yet another evidence of bearish pressure. Currently, these strong support zones are acting as strong resistance zones for us. Until these two strong resistance zones (marked in red) shown in the image below hold, 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, Parabolic Sar, Key Support Zone
AUDCAD H1(1 Hour) Chart Analysis
- Bearish Trend Pattern, ADX Indicator, Two Strong Resistance Zones
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
Home Trader Club Team
