AUDCAD Technical Analysis And Forecast Follow Up

Hi Traders! AUDCAD technical analysis and forecast follow up post is here. On April 28th I shared this “AUDCAD Technical Analysis And Forecast” 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, based on the Heikin Ashi candles we can see that currently, we have strong bearish bodies in downward moving market conditions here as well, so it basically reflects a bearish environment. In addition to this, the price which is moving lower has created a bearish trend pattern in the form of three lower highs, lower lows which we may consider as evidence of bearish pressure. Generally, after a bearish trend pattern, we may expect corrections and then further continuation lower. Currently it looks like a correction is happening. Also, while measuring this bearish trend pattern using the Fibonacci retracement tool we have two key resistance zones that has formed. The first key resistance zone is formed by the 23.8%(0.91920) and 38.2%(0.92538) Fibonacci retracement zones of the bearish trend pattern. The second key resistance zone is formed by the 50%(0.93037) and 61.8%(0.93536) Fibonacci retracement zones of the bearish trend pattern. Until these two key resistance zones hold my view remains bearish here and I expect the price to move lower further.

AUDCAD H4(4 Hours) Chart Current Scenario

Based on the above-mentioned analysis, on the H4 chart, my view was bearish here and I was expecting the price to move lower further until the key resistance zones hold. The price action followed my analysis exactly as I expected it to here. After the bearish trend pattern the pullback that I was looking for happened with the price reaching the first key resistance zone, respected it and bounced lower from this zone. In addition to this, the price had created a bearish hidden divergence between the first high that has formed at 0.93485 and the second high that has formed at 0.92548 based on the MACD indicator, we may consider this as a fact provided by the market supporting the bearish view. The price then moved lower further as I expected it to and delivered 330+ pips move to downside!
As traders we always have two choices, the first one is to fall in love with our analysis and try to convince the market and expect the price to move in the direction as per our wish. The second one is to follow the facts that the market provides us and make the right actions according to that. As you know the first option won’t help us and as you can see in the example above what happened when we followed the facts that the market hinted to us and took the right action according to that.

Happy Trading!

Arvinth Akash
Traders Academy Club Team