Hi Traders! AUDUSD short term forecast follow up and update is here. On January 17th, 2024 I shared this “AUDUSD 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 the Home Trader Club. Spoiler alert – free memberships are available!
My Idea:
On the H4 chart, currently, we have a strong bearish momentum and the price which is moving lower has broken below a strong support zone and is holding below it, we may consider this as evidence of bearish pressure. After the breakout, this strong support zone is acting as a strong resistance zone for us. Also, based on the Heikin Ashi candles we can see that currently, we have strong bearish bodies in downward-moving market conditions so it basically reflects a bearish environment. In addition to this, the price has also created lower lows based on the MACD indicator, which is another sign of gaining momentum toward the bearish side. Also, 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. So the bottom line here is that, everything looks good here for the bears and I expect the price to move lower further in the short term after pullbacks until the strong resistance zone (marked in red) shown in the image below holds.
Based on the above mentioned analysis my short term view was bearish in this pair and I was expecting the price to move lower further after pullbacks until the strong resistance zone holds. The price action followed my analysis exactly as I expected it to here. After the strong bearish move, the pullback that I was looking for happened and then the price moved lower further as I expected it to and delivered 150+ pips move to downside!
On the H4 chart, the market provided us with various facts supporting the bearish view. The price which was moving higher created a continuing bearish divergence between the first high formed at 0.66131and the second high which formed at 0.66237 based on the MACD indicator. The price then moved lower and broke below the most recent uptrend line. We may consider these as facts provided by the market supporting the bearish view and also there we no signs opposing this bearish view. Then as you can see in the image below how the price moved lower further after that and provided an excellent move to the downside!
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 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
Home Trader Club Team.
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