Hi Traders! AUDNZD short term forecast update and follow up is here. On February 16th 2023 I shared this “AUDNZD Technical Analysis And Short Term 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 Home Trader Club. Spoiler alert – free memberships are available!
My Idea
On the H4 chart, the price which is moving higher has created a false break with a bearish divergence that has formed between the first high that has formed at 1.10304 and the second high that has formed at 1.10319 based on the MACD indicator which we may consider as evidence of bearish pressure. In addition to this, 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. If the price breaks below the last low at 1.09283 with the momentum I may then expect short-term bearish moves to happen here. Alternatively, if the price moves higher breaks and holds above the key resistance zone (marked in red) shown in the image below, then this bearish view will be invalidated.
In AUDNZD based on the above-mentioned analysis, my short-term view was bearish until the key resistance zone (invalidation level) holds. Also, I mentioned that “If the price breaks below the last low at 1.09283 with the momentum I may then expect short-term bearish moves to happen here”. The price action didn’t follow my analysis here, the validation for the bearish view which is a valid breakout below the last low at 1.09283 didn’t happen. Alternatively, the price moved higher and we get a valid breakout above the key resistance zone. This is a contradictory sign opposing the bearish view. My current view on this pair is neutral.
So, traders, this is why I wanted to show this example to help you understand why we should always trade based on the facts and hints provided by the market and take the right actions according to that. Even though we had facts supporting the bearish view here, the price moved higher, and we got a valid breakout above the key resistance zone which we may consider as a fact provided by the market invalidating this bearish view.
When it comes to trading, there are various important factors that we need to pay attention to, just because we have a good setup doesn’t mean that we can enter the trade randomly and it will pay us huge profits. First of all, we need to validate the entry and we should have a perfect entry plan to get into the trade which is a key factor when it comes to trading. This AUDNZD short-term forecast is yet another good example of this scenario.
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Happy Trading!
Arvinth Akash
Home Trader Club Team.
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