Hi Traders! EURCAD short term forecast update and follow up is here. On April 17th, 2024 I shared this “EURCAD 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, the price which was creating series of lower highs, lower lows has made a turn around and has created higher highs for the first time in a while, which we may consider as evidence of bullish pressure. In addition to this, the price has also broke above the most recent downtrend line, which we may consider as another evidence of bullish pressure. Also, we could see that the price has created a bullish divergence which formed between the first low formed at 1.46165 and the second low formed at 1.46104 based on the MACD indicator. The price then moved higher and broke above the last high at 1.46653 creating higher highs, we have this higher highs on the MACD indicator as well, thus forming a classical setup of bullish divergence followed by bullish convergence, we may consider these as other evidences of bullish pressure. Generally after a bullish convergence we may expect correction and then further continuation higher and currently, it looks like a correction is happening. So everything looks good here for the bulls and until the two strong support zones hold my short term view remains bullish here and I expect the price to move higher further after pullbacks.
EURCAD H1(1 Hour) Chart Current Scenario
Based on the above-mentioned analysis my short-term view was bullish here and until the two strong support zones hold I was expecting the price to move higher further after pullbacks. The price action didn’t follow my analysis here and this idea failed. After the bullish convergence, the price which was moving lower reached the second strong support zone but the price didn’t hold in this zone as I expected it to. The price moved lower further and we got a valid breakout below this second strong support zone thus invalidating the bullish view here. In addition to this the price has also created a bearish trend pattern in the form of three lower highs and lower lows, which is another sign opposing this bullish view. So based on all this my current view on EURCAD is neutral.
So traders, this is why I wanted to show this example to help you understand why we should always trade based on the facts and hints provided by the market and take the right actions according to that. Even though we had various facts supporting the bullish view, the price didn’t hold in the support zones as I expected it to and broke below them, which is a contradictory sign provided by the market opposing the bullish view. In addition to this, the price has also created a bearish trend pattern which is yet another contradictory sign provided by the market opposing the bullish view. Also, you should keep in mind that losses are part of trading we can’t expect every trade to go as per our plan and provide us profits. In trading, we can’t avoid losses but in order to be successful in trading, we should know how to cut losses early and how to manage the trade when the price goes in the opposite direction.
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Happy Trading!
Arvinth Akash
Home Trader Club Team.
