Hi Traders! EURAUD forecast follow up and update is here. On July 1st I shared this “EURAUD 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 Traders Academy Club. Spoiler alert – free memberships are available!
My Idea
On the H1 chart we have a bearish divergence that has formed between the first high that has formed at 1.58271 and the second high that has formed at 1.58598 based on the MACD indicator. The price then moved lower and broke below the last low at 1.58132 thus forming a classical setup of bearish divergence followed by bearish convergence, we may consider this as evidence of bearish pressure. As per the book scenario after a bearish convergence we may expect corrections and then further continuation lower. Currently it looks like a correction is happening. So based on all this my view here is bearish and until the strong resistance zone shown in the image below (marked in blue) holds I expect the price to move lower further in the short term.
Based on the above-mentioned analysis my 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 here. The price which was moving higher reached the strong resistance zone, respected it and bounced lower from this zone, delivering 260+ pips move!
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Happy Trading!
Yordan Kuzmanov
Chief Trader at the Traders Academy Club
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