Hi Traders! CHFJPY short term forecast update and follow up is here. On October 31st I shared this “CHFJPY 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!
My Idea
On the H1 chart, we could see that the price has created a bullish divergence which formed between the first low formed at 165.549 and the second low formed at 164.980 based on the MACD indicator. The price then moved higher and broke above the last high at 166.075 creating higher highs, thus forming a classical setup of bullish divergence followed by bullish convergence, we may consider these as evidence of bullish pressure. 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 a value over 25, we may consider this as yet another evidence of bullish pressure. Also, currently, there are no signs opposing this bullish view and in addition to this, based on the Parabolic Sar we could see that the dots are below the price which we may consider as yet another evidence of bullish pressure. So based on all this, until the strong support zone shown in the image below (marked in green) holds my short-term view remains bullish here and I expect the price to move higher further after pullbacks.
CHFJPY H1(1 Hour) Chart Current Scenario
In this pair on the H1 chart, based on the above-mentioned analysis my short-term view was bullish and I was expecting the price to move higher further until the strong support zone holds. The price action followed my analysis here exactly as I expected it to. After the bullish convergence, the pullback that I was looking for happened and then the price moved higher further as I expected it and delivered 170+ pips move to the upside so far!
On the H1 chart, the market provided us with various facts supporting the bullish view. After the bullish convergence the price which was moving lower created a bullish divergence between the first low that has formed at 165.872 and the second low that has formed at 165.704 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 an excellent move to the upside!
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 bullish 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 and 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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Happy Trading!
Arvinth Akash
Home Trader Club Team.
