EURCAD Short Term Forecast Update And Follow Up

Hi Traders! EURCAD short term forecast update and follow up is here. On September 21st, 2023 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 H4 chart, currently, we have a strong bearish momentum and the price which is moving lower has broken below a strong support zone and is holding below it, we may consider this as evidence of bearish pressure. After the breakout, this strong support zone is acting as a strong resistance zone for us. Also, the price which is moving lower has created a bearish trend pattern in the form of three lower highs, lower lows which we may consider as evidence of bearish pressure. Generally, after a bearish trend pattern, we may expect corrections and then further continuation lower. Currently it looks like a correction is happening. Also, based on the Heikin Ashi candles we can see that currently, we have strong bearish bodies in downward moving market conditions so it basically reflects a bearish environment. In addition to this, the ADX indicator gave a bearish signal here at the cross of -DI (red line) versus +DI (green line) and the main signal line (silver line) reads value over 25 which we may consider as yet another evidence of bearish pressure. So the bottom line here is that, everything looks good here for the bears and I expect the price to move lower further in the short term after pullbacks until the strong resistance zone (marked in red) shown in the image below holds.

 

 

 

EURCAD H4(4 Hours) Chart Current Scenario

Based on the above-mentioned analysis, on the H4 chart, my short term view was bearish 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 here. After the bearish trend pattern, the pullback that I was looking for happened and most importantly the price was holding below the strong resistance zone. The price then moved lower further as I expected it  and delivered 240+ pips move to downside until it was blocked by a bullish divergence.

 

 

We had facts supporting the bearish view on the H1 chart. After the bearish trend pattern, we had a flat correction in the form of a range and the price which was respecting this range moved lower and broke below the bottom of it. We may consider this as a hint provided by the market supporting the bearish view and also there were no signs opposing this bearish view. We then had a pullback and then the price moved lower further and provided a wonderful move to the downside as you can see in the image below.

 

 

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 bearish 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 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.

For similar trade ideas and much more I invite you to

 

Happy Trading!

Arvinth Akash
Home Trader Club Team.