Hi Traders! AUDUSD forecast follow up and update is here. On July 19th 2022 I shared this “AUDUSD 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 H4 chart, 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 0.67106 and the second low that has formed at 0.66812 based on the MACD indicator. The price then moved higher and broke above the last high at 0.68030 creating higher highs, thus forming a classical setup of bullish divergence followed by bullish convergence, we may consider these as evidences of bullish pressure. Hence as per the book scenario, after a bullish convergence, we may look for corrections to happen and then further continuation to the upside. In addition to this, the ADX indicator gave a bullish signal here as well, 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. Until the key support zone shown in the image below (marked in blue) holds my view remains bullish here and I expect the price to move higher further after pullbacks.
AUDUSD H4(4 Hours) Chart Current Scenario
On the H4 chart, based on the above-mentioned analysis my view was bullish here and I was expecting the price to move higher further until the key support zone holds. After the bullish convergence, the pullback that I was looking for happened but most importantly the price was holding above the key support zone. Also, there were no signs opposing this bullish view. The price then moved higher further as I expected it to and delivered around 200 pips move to the upside as you can see in the image below.
On the H1 chart, the market provided us with various facts supporting the bullish view. After the bullish convergence on the H4 chart, the pullback happened in the form of double wave to the downside on the H1 chart with the price creating a bullish divergence between the first low that has formed at 0.68728 and the second low that has formed at 0.68586 based on the MACD indicator. In addition to this, the price then moved higher and broke above the most recent downtrend line. We may consider these as facts provided by the market supporting the bullish view. Then as you can see in the image below how the price moved higher after that and provided an excellent move to the upside.
(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 to us and took the right action according to that.
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Happy Trading!
Arvinth Akash
Traders Academy Club Team.
