Hi Traders! EURCHF short term forecast follow up and update is here. On August 3rd I shared this “EURCHF 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 Traders Academy Club. Spoiler alert – free memberships are available!
My Idea
On the H1 chart, the price which was moving lower created a bullish divergence which has formed between the first low at 0.97097 and the second low at 0.96992 based on the MACD indicator. In addition to this, we have this bullish divergence on the CCI indicator as well, which we may consider as another evidence of bullish pressure. The price then moved higher and broke above the last high at 0.97634 thus creating higher highs. Also, we should note that the price which was in a bearish trend so far creating series of lower highs, lower lows has created higher highs for the first time in a while which we may consider as sign of a possible trend change. We may consider these as evidences of bullish pressure. Until the strong support zone (marked in blue) shown in the image below holds my short term view remains bullish here. If we get a valid breakout above the high at 0.98050 we may then consider it as a validation for this bullish view.
EURCHF H1(1 Hour) Chart Current Scenario
In this pair based on the above-mentioned analysis my short term view was bullish until the strong support zone holds. Also, I mentioned that “If we get a valid breakout above the high at 0.98050 we may then consider it as a validation for this bullish view”. The validation for the bullish view which is a valid breakout above the high at 0.98050 didn’t happen here. Alternatively, the price moved lower and we got a valid breakout below the strong support zone, thus invalidating this 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 0.98050 didn’t happen here. Alternatively, the price moved lower and broke below the strong support zone, which is a contradictory sign opposing the bullish view. Then as you can see in the image above how the price moved lower further 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 short term forecast is yet another good example of this scenario.
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Happy Trading!
Arvinth Akash
Traders Academy Club Team
