Hi Traders! AUDCHF short term forecast follow up and update is here. On October 21st I shared this “AUDCHF Short Term Forecast And Technical Analysis” 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
Looking at the H1 chart, we could see that the price which was moving higher has created a bearish divergence between the first high that has formed at 0.69314 and the second high that has formed at 0.69322 based on the MACD indicator. The price then moved lower and broke below the last low at 0.68943 thus forming a classical setup of bearish divergence followed by bearish convergence, we may consider these as evidences of bearish pressure. Generally, after a bearish convergence we may look for corrections and then 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 value over 25 which we may consider as yet another evidence of bearish pressure. Until the invalidation level (0.69322) shown in the image below holds my short term view remains bearish here and I expect the price to move lower further.
AUDCHF H1(1 Hour) Chart Current Scenario
In this pair, based on the above-mentioned analysis my short term view was bearish and I was expecting the price to move lower further until the invalidation level holds. After the bearish convergence we had a pullback and then the price moved lower further and provided around 50+ pips move.
The price then moved higher and reached the invalidation level but it didn’t break above this level. The price respected the invalidation level, we also had a bearish divergence that has formed between the first high that has formed at 0.69206 and the second high that has formed at 0.69305 based on the MACD indicator. The price then moved lower and broke below the most recent uptrend line which we may consider as facts provided by the market supporting the bearish view. The price then moved lower further and has delivered 150+ pips move so far.
(Note: You can learn about a Killer Forex Strategy “Double Trend Line Principle” here)
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 us and took the right action according to that.
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Happy Trading!
Arvinth Akash
Traders Academy Club Team
