Hi Traders! AUDUSD short term forecast follow up and update is here. On February 8th 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 H1 chart, the price which is 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 a further continuation lower. Currently, it looks like a correction is happening. Also, we have a bearish divergence that has formed between the first high which formed at 0.69509 and the second high which formed at 0.69957 based on the MACD indicator, which we may consider as evidence of bearish pressure. In addition to this, based on the Stochastic Oscillator we could see that the price has reached its extreme here as well which we may consider as yet another evidence of bearish pressure. Until the two strong resistance zones (marked in red) shown in the image below hold, my short-term view remains bearish here and I expect the price to move lower further.
AUDUSD H1(1 Hour) Chart Current Scenario
In this pair my short-term view was bearish and I was expecting the price to move lower further until the two strong resistance zones hold. The price action moved exactly as I expected it to in my analysis. After the bearish trend pattern, we had a pullback with the price reaching the first strong resistance zone, respected it and then it bounced lower from this zone. We also had a bearish divergence between the first high which formed at 0.69957 and the second high which formed at 0.70102 based on the MACD indicator. The price then moved lower and broke below the most recent uptrend line, we may consider this as evidence of bearish pressure. The price then moved lower further and has delivered 420+ pips move to the downside as you can see in the image below!
(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 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.
