Hi Traders! Today I am sharing with you the AUDCAD technical analysis and short term forecast 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 H4 chart here.
AUDCAD H4(4 Hours) Chart Analysis – Key Support Zone, Bullish Convergence, ADX Indicator
On the H4 chart, the price which was moving lower reached a key support zone. This key support zone is formed by the 261.8%(0.89921) Fibonacci expansion level of the first wave, the 161.8%(0.90426) Fibonacci expansion level of the second wave. The price respected this zone and bounced higher from this zone. Also, 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 0.91083 and the second low that has formed at 0.90480 based on the MACD indicator. The price then moved higher and broke above the last high at 0.92033 creating higher highs, thus forming a classical setup of bullish divergence followed by bullish convergence. Hence as per the book scenario, after a bullish convergence, we may look for corrections to happen and then further continuation to the upside. Currently it looks like a correction is happening. 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 bullish view. We may now move down to lower timeframe and look for evidences supporting this short term bullish view.
AUDCAD H1(1 Hour) Chart Analysis – Bullish Trend Pattern, Heikin Ashi Candles, Higher Highs, Two Strong Support Zones
On the H1 chart, we have a bullish rally and currently it looks like this bullish rally is about to continue itself. Based on the Heikin Ashi candles we can see that currently, we have strong bullish bodies in upward moving market conditions so it basically reflects a bullish environment. Also, the price which was moving higher has created a bullish trend pattern in the form of three higher highs, higher lows, we may consider this as another evidence of bullish pressure. Generally, after a bullish trend pattern, we may expect corrections and then potential continuation higher. In addition to this, the price which was moving higher has created higher highs based on the MACD indicator, which is a sign of gaining momentum towards the bullish side. Currently, it looks like a correction is happening, also we had two strong resistance zones that has formed and the price which was moving higher has broken above these zones and is holding above them. After the breakout these strong resistance zones are acting as two strong support zones for us. Until both these strong support zones shown in the image below holds my short term view remains bullish here and I expect the price to move higher further.
Technical Analysis & Forecast Summary
AUDCAD H4(4 Hours) Chart Analysis
- Key Support Zone, Bullish Convergence, ADX Indicator
AUDCAD H1(1 Hour) Chart Analysis
- Bullish Trend Pattern, Heikin Ashi Candles, Higher Highs, Two Strong Support 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 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
