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Hi Traders! CADCHF short term forecast follow-up and update is here. On May 30th I shared this “CADCHF 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 Home Trader Club. Spoiler alert – free memberships are available!
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My Idea:
On the H1 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, 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 further continuation lower. 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 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.
CADCHF 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 strong resistance zone holds. The price action followed my analysis exactly as I expected it to here. After the bearish trend pattern, we had a pullback and then the price moved lower further and delivered a fantastic move to the downside as you can see in the image below!
On the M15 chart, the market provided us with various facts supporting the bearish view. The price, which was moving higher, created a bearish divergence between the first high, formed at 0.66267 and the second high, formed at 0.66479 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 were 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 a fantastic move to the downside!
So, traders, this is why I wanted to show this example to help you understand how important it is to follow the facts. The facts were supporting the bearish view here, and there were no signs against it. When the facts do happen as we expected, you can see how the price perfectly moved as per the plan. Because these are the kind of hints the market provides us with the majority of the time, it’s our obligation as traders to be able to listen to these things that the market tells us, and we should try to make the right actions accordingly.
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Arvinth Akash
Home Trader Club Team.