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 Traders Academy 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 – Key Support Zone, Bullish Divergence, Engulfing Candle Pattern, Stochastic Oscillator
On the daily chart, the price which is moving lower has reached a key support zone formed by the 161.8%(0.89215) Fibonacci expansion level of the first wave and the 61.8%(0.88738) Fibonacci expansion level of the second wave. The price respected this zone and is currently bouncing higher from it. Also, we have a bullish divergence that has formed between the first low that has formed at 0.89187 and the second low that has formed at 0.88830 based on the MACD indicator, which we may consider as evidence of bullish pressure. Also, we have an engulfing candle pattern that has formed which we may consider as another evidence of bullish pressure. In addition to this, based on the Stochastic Oscillator we could see that the price has reached its extreme, which we may consider as yet another evidence of bullish pressure. So based on all this, my short term view is bullish here and we may now move down to lower timeframe and look for evidences supporting this bullish view.
AUDCAD H1(1 Hour) Chart Analysis – Bullish Convergence, ADX Indicator
Looking at the H1 chart, we could see that the price which was moving lower created a bullish divergence that has formed between the first low that has formed at 0.89089 and the second low that has formed at 0.88830 based on the MACD indicator. The price then moved higher and broke above the last high at 0.89727 creating higher highs, thus forming a classical setup of bullish divergence followed by bullish convergence, we may consider these as evidences of bullish pressure. In addition to this, 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 yet another evidence of bullish pressure. Also, currently there are no signs opposing this short term bullish view. Until the key support zone shown in the image below (marked in blue) holds my short term view remains bullish here and I expect the price to move higher further.
Technical Analysis & Forecast Summary
AUDCAD D1(Daily) Chart Analysis
- Key Support Zone, Bullish Divergence, Engulfing Candle Pattern, Stochastic Oscillator
AUDCAD H1(1 Hour) Chart Analysis
- Bullish Convergence, ADX Indicator
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 buy setup then you can use any setup and strategy that you have in your arsenal to look for bullish moves and join this buy trade.
Also, don’t forget to protect your buy 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
