Hi Traders! Today I share with you my AUDJPY short term forecast and technical analysis post, 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!
On the H4 chart, the price which was 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 deeper correction has happened and the price which is moving higher has reached a key resistance zone which is formed by the 100%(95.528) Fibonacci expansion level of the first wave of this correction. The price respected this zone and is bouncing lower from it. In addition to this, we could see that the price which was moving higher has created a bearish divergence between the first high that has formed at 94.426 and the second high that has formed at 95.148 based on the MACD indicator. The price then moved lower and broke below the last low at 93.489 creating lower lows, 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.and also, 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. Until the key resistance zone shown in the image below (marked in red) holds, my short term view remains bearish here and I expect the price to move lower further.
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
Traders Academy Club Team.
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