Hi Traders! CHFJPY short term forecast update and follow up is here. On March 15th 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 H4 chart, we have a bearish divergence that has formed between the first high formed on 15th February 2023 and the second high formed on 10th March 2023 based on the MACD indicator which we may consider as evidence of bearish pressure. In addition to this, the price which was moving lower has broken below the most recent uptrend line, which we may consider as another evidence of bearish pressure. Also, we have this uptrend line breakout on the RSI indicator as well, which we may consider as yet another evidence of bearish pressure. So based on all this, until the strong resistance zone (marked in red) shown in the image below holds my short-term view remains bearish here and I expect the price to move lower further.
Based on the above-mentioned analysis, on the H4 chart, my short-term view was bearish here 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 in my forecast. After the breakout below the most recent uptrend line, the price moved lower further and delivered 430+ pips move to the downside!
On the M15 chart, the market provided us with various facts supporting the bearish view. After the breakout below the uptrend line on the H4 chart, we had a pullback and the price which was moving higher on the M15 chart created a bearish divergence between the first high formed at 143.950 and the second high formed at 144.155 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 amazing 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 at 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 according to that.
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Happy Trading!
Arvinth Akash
Home Trader Club Team.
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