Hi Traders! AUDUSD short term forecast follow up and update is here. On April 5th I shared this “AUDUSD Short Term 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 the Home Trader Club. Spoiler alert – free memberships are available!
My Idea:
On the H1 chart, the price which is moving higher has created a bullish trend pattern in the form of three higher highs, and higher lows, we may consider this as evidence of bullish pressure. Generally, after a bullish trend pattern, we may expect corrections and then potential continuation higher. Currently, it looks like a correction is happening. Also, we could see that the price which was moving higher has created higher highs based on the MACD indicator, which is a sign of gaining momentum towards the bullish side. In addition to this, the ADX indicator gave a bullish signal here 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, we had two strong resistance zones that has formed and the price which was moving higher has broken above these zones and is holding above them. After the breakout, these strong resistance zones are acting as two strong support zones for us. Until both these strong support zones (marked in blue) shown in the image below hold my short-term view remains bullish here and I expect the price to move higher further.
AUDUSD H1(1 Hour) Chart Current Scenario
Based on the above-mentioned analysis my short-term view was bullish here and I was expecting the price to move higher further until the two strong support zones hold. The price action followed my analysis here exactly as I expected it to. After the bullish trend pattern, the pullback that I was looking for happened with the price reaching the second strong support zone, respected it and then it bounced higher from this zone. The price then moved higher further and has delivered 180+ pips move to the upside!
On the H1 chart, the market provided us with various facts supporting the bullish view. The price which was moving lower created a bullish divergence between the first low which formed at 0.66766 and the second low that has formed at 0.66190 based on the MACD indicator. 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 a wonderful move to the upside!
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.
