Hi Traders! EURAUD short term forecast update and follow up is here. On January 24th 2024 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 H4 chart, the price which was moving higher has created a bullish trend pattern in the form of three higher highs, and higher lows, we may consider this as 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 and the price which is moving lower has reached a strong support zone. Also, we could see that the price which is moving lower created a bullish hidden divergence between the first low that formed at 1.61270 and the second low that formed at 1.64800, followed by a potential continuing bullish divergence between the first low that formed at 1.64800 and the second low that has formed at 1.64701 based on the MACD indicator, which we may consider as evidences of bullish pressure. There are two possible scenarios from here, the price might move higher from the current zone or alternatively if it moves lower then the next area to look for bullish setups with bullish evidences would be the second strong support zone. Until both these strong support zones (marked in green) shown in the image below holds my short term view remains bullish here and I expect the price to move higher further.
EURAUD H4(4 Hours) Chart Current Scenario
In this pair, based on my technical analysis I mentioned that “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”. The price action followed my analysis exactly as I expected it to here. The price which was moving lower created a false break of the first strong support zone and then it moved higher from this zone. The price then moved higher further and delivered around 400 pips move!
On the H4 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 1.64800 and the second low that has formed at 1.63488 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 amazing 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.
