Hi Traders! EURCAD short term forecast update and follow up is here. On February 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, the price which is moving lower has created a bearish trend pattern in the form of three lower highs, and lower lows which we may consider as evidence of bearish pressure. Generally, after a bearish trend pattern, we may expect corrections and then a further continuation lower. Currently, it looks like a correction is happening. 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 a value over 25 which we may consider as yet another evidence of bearish pressure. Also, we had two strong support zones that have formed and the price which was moving lower has broken below these zones and is holding below them, we may consider this as yet another evidence of bearish pressure. Currently, these strong support zones are acting as strong resistance zones for us. Until these two strong resistance zones (marked in red) shown in the image below hold, my short-term view remains bearish here and I expect the price to move lower further.
EURCAD H4(4 Hours) Chart Current Scenario
Based on the above-mentioned analysis my short-term view was bearish here and until the two strong resistance zones hold I was expecting the price to move lower further. The price action didn’t follow my analysis here and this idea failed. The price which was moving higher reached the second strong resistance zone but the price didn’t hold in this zone as I expected it to. The price then moved higher further and we got a valid breakout above the second strong resistance zone thus invalidating this short-term bearish view. My current view on this pair 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 bearish view here, the price didn’t hold in the two resistance zones as I expected it to and broke above them, which is a contradictory sign provided by the market opposing the bearish 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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Arvinth Akash
Home Trader Club Team.
