Hi Traders! EURAUD short term forecast update and follow up is here. On July 11th 2023 I shared this “EURAUD Technical Analysis And Short Term Forecast” 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, based on the Heikin Ashi candles we can see that currently, we have strong bullish bodies in upward moving market conditions so it basically reflects a bullish environment. Also, the price which is moving higher has created a bullish trend pattern in the form of three higher highs, higher lows, we may consider this as another 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, there are no signs opposing this short term bullish view at the moment. In addition to this, 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 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.
Based on the above-mentioned analysis my short term view was bullish in this pair and I was expecting the price to move higher further until the two strong support zones hold. After the bullish trend pattern, the price which was moving lower broke below the second strong support zone and then it moved back again inside this zone. The price then moved higher further as I expected it to and delivered around 370 pips move!
On the M15 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 that has formed at 1.62949 and the second low that has formed at 1.62334 based on the MACD indicator, which we may consider as a fact supporting the bullish view. The price then moved higher and broke above the most recent downtrend line, which we may consider as another fact 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 as 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.
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