Hi Traders! EURAUD short term forecast update and follow up is here. On September 22nd I shared this “EURAUD 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 Traders Academy Club. Spoiler alert – free memberships are available!
My Idea
On the H4 chart, after the strong bearish move currently it looks like a correction is happening in the form of a range. This range is formed by the highs and lows reaching parallel resistance and support zones. In addition to this, while measuring the first and second wave inside this range using the Fibonacci expansion tool, we have a key resistance zone that has formed. This key resistance zone is formed by the 161.8%(1.62643) Fibonacci expansion level of the first wave, the 100%(1.62508) Fibonacci expansion level of the second wave and the top of this range. Also, we have a bearish divergence that has formed between the first high that has formed at 1.60848 and the second high that has formed at 1.62334 based on the MACD indicator. Until the key resistance zone holds my view remains bearish here. If the price breaks and holds below the bottom of this range we may then consider it as a validation for the short term bearish view and may expect the price to continue lower further.
EURAUD H4(4 Hours) Chart Current Scenario
In this pair based on the above-mentioned analysis my view was bearish here and I was expecting the price to move lower further until the key resistance zone holds. Also, I mentioned that “if the price breaks and holds below the bottom of this range we may then consider it as a validation for the short term bearish view and may expect the price to continue lower further”. The price action followed my analysis exactly as I expected it to here. The validation for the bearish view which is a valid breakout below the bottom of the range happened and then the price moved lower further and delivered 120+ pips move so far.
On the M15 chart, the market provided us with various facts supporting the bearish view. After the breakout below the H4 range, we had a pullback on the M15 chart with the price creating a bearish hidden divergence between the first high at 1.62036 and the second high at 1.61954 based on the MACD indicator. The price then moved lower and broke below the most recent uptrend line which we may consider as facts provided by the market supporting the bearish view. Also there we no signs opposing this bearish view. Then as you can see in the image below how the price moved lower after that and provided an amazing move to the downside.
(Note: You can learn about a Killer Forex Strategy “Double Trend Line Principle” here)
So traders when it comes to trading, there are various important factors that we need to pay attention to, just because we have a good setup doesn’t mean that we can enter the trade randomly and it will pay us huge profits. First of all, we need to validate the entry and we should have a perfect entry plan to get into the trade which is a key factor when it comes to trading. This EURAUD forecast is yet another good example of this scenario.
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Happy Trading!
Arvinth Akash
Traders Academy Club Team.
