EURCAD Forecast Follow Up And Update

Hi Traders! EURCAD forecast follow up and update is here. On January 20th I shared this “EURCAD Forecast And Technical Analysis” post in my 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, we could see that the price which is moving lower has created a bearish trend pattern in the form of three lower highs, lower lows we may consider this as evidence of bearish pressure. Generally, after a bearish trend pattern, we may expect corrections and then further continuation lower. Currently, it looks like the correction that we were looking for has happened. In addition to this, we had a bearish hidden divergence that has formed between the first high that has formed on 11th January 2021 and the second high that has formed on 19th January 2021 based on the MACD indicator, we may consider this as another evidence of bearish pressure.  Also, we have a strong support zone that has formed and the price which is moving lower has broken below this zone and is holding below it. Currently, this strong support zone is acting as a strong resistance zone for us. Until this strong resistance zone holds my view remains bearish here and I expect the price to continue lower further.

EURCAD H4(4 Hours) Chart Current Scenario

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 and moved lower further delivering around 130+ pips move so far.

The market provided us with various facts supporting the bearish view on the H1 chart. The price which was moving higher created two false breaks and then it moved lower and broke below the most recent uptrend line. We may consider these as facts provided by the market supporting the bearish view, also there were no signs opposing this bearish view. Then as you can see in the screenshot below how the price moved lower further and provided a fantastic move to the downside.

(Note: You can learn about a Killer Forex Strategy “Double Trend Line Principle” here)

Currently, on the H4 chart, we have a bullish divergence in play, this is something that we need to pay attention to. As I always say when you see opposite evidences like this, you should consider managing your trade and secure your profits (cash out or partial cash out or trailing protections or partial hedge, etc.. depending on the strategy that you work with).

Note: If you want to learn about Money Management you can find it here

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 us and took the right action according to that.

For similar trade ideas and much more join the Traders Academy Club and get access to our complete watch list and trade report. 

This is how the report looks like. A table with the hottest market opportunities, screenshot behind every pair and time frame (anything that is in blue inside the table is clickable and leads to a screenshot) + a summary in text format, kind of highlights. And of course, Live Market Analysis every single day.

 

If you have any further questions, don’t hesitate to drop a comment below!

 

Happy Trading!

Yordan Kuzmanov
Chief Trader at the Traders Academy Club

 

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