Hi Traders! EURCHF short term forecast update and follow up is here. On October 28th I shared this “Technical Analysis – EURCHF 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 Traders Academy Club. Spoiler alert – free memberships are available!
My Idea
On the H4 chart, the price which is moving lower has currently reached a key support zone formed by the 161.8%(1.06618) Fibonacci expansion level of the first wave and the 61.8% (1.06519) Fibonacci expansion level of the second wave. In addition to this, the daily key support zone also coincides in the same area which makes this a very strong support zone. Also, we have a bullish divergence that has formed between the first low that has formed at 1.06581 and the second low that has formed at 1.06343 based on the MACD indicator. We have this bullish divergence on the RSI indicator as well, we may consider these as evidences of bullish pressure. So everything looks good here for the bulls and until the key support zone holds my short term view remains bullish here. If the price moves higher and breaks above the high at 1.07028 we may then consider it as a validation for the bullish view and may expect the price to move higher further in the short term.
EURCHF H4(4 Hours) Chart Current Scenario
In this pair based on the above-mentioned analysis, my view was bullish here and I was expecting the price to move higher further until the key support zone holds. Also, I mentioned that “if we get a valid breakout above the high at 1.07028 we may then consider it as a validation for the bullish view and may expect the price to move higher further”. The price action didn’t follow my analysis here, the validation for the bullish view which is a valid breakout above the high at 1.07028 didn’t happen. The price then moved lower and broke below the key support zone and held below it, thus invalidating the bullish view. My current view on this pair is neutral.
Even though we had facts supporting the bullish view here, the validation for the bullish view which is a valid breakout above the high at 1.07028 didn’t happen here. The price which bounced higher from the key support zone didn’t break above the high at 1.07028, which is a contradictory sign. Then as you can see in the image above the price moved lower further and broke below the key support zone after that, thus invalidating this bullish view. This is why we should always trade based on the facts and hints provided by the market and take the right actions according to that.
So traders, when it comes to trading, there are various important factors that we need to pay attention to, just because we have a good setup doesn’t mean that we can enter the trade randomly and it will pay us huge profits. First of all, we need to validate the entry and we should have a perfect entry plan to get into the trade which is a key factor when it comes to trading. This EURCHF forecast is yet another good example of this scenario.
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Happy Trading!
Arvinth Akash
Traders Academy Club Team
