Hi Traders! EURAUD short term forecast update and follow up is here. On May 20th 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 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 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 based on the Parabolic Sar we could see that the dots are below the price here as well which we may consider as another evidence of bullish pressure. In addition to this, the ADX indicator gave a bullish signal here as well at the cross of +DI (green line) versus -DI (red line) and the main signal line (silver line) reads value over 25, we may consider this as another evidence of bullish pressure. Also based on the Stochastic Oscillator we could see that the price has reached its extreme which we may consider as yet another evidence of bullish pressure. Until the strong support zone shown in the image below holds my view remains bullish here and I expect the price to move higher further in the short term.
EURAUD H4(4 Hours) Chart Current Scenario
Based on the above mentioned analysis, my short term view was bullish here and I was expecting the price to move higher further until the strong support zone holds. The price action followed my analysis here and moved higher further delivering around 100 pips move before it was blocked by a bearish divergence. The price then moved lower but it was holding above the strong support zone and then it moved higher again and provided 140+ pips move so far.
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 1.57145 and the second low that has formed at 1.56957 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.
(Note: You can learn about a Killer Forex Strategy “Double Trend Line Principle” here)
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 at majority of the times 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.
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To your success,
Vladimir Ribakov
Certified Financial Technician
