Hi Traders! EURNZD forecast follow up and update is here. On June 3rd I shared this EURNZD Forecast And Technical Analysis in my 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!
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Now let’s summarize the idea first:
EURNZD H4(4 Hours) Chart Analysis – Range Breakout, Lower Lows, ADX Indicator
On the H4 chart, the price was moving inside a range, which is formed by the highs and lows reaching parallel resistance and support zones. The price which was respecting this range so far has currently broken below the bottom of this range and is holding below it. In addition to this the price has also created lower lows between the first low that has formed on 27th May 2020 and the second low that has formed on 3rd June 2020 based on the MACD indicator, which we may consider as evidence of bearish pressure. Also, the ADX indicator gave bearish signal at the cross of -DI (red line) versus +DI (green line) and the main signal line (silver line) reads value over 25, we may consider this as another evidence of bearish pressure. We may now move down to lower timeframe and see if we can find evidences supporting this bearish view.
EURNZD H1 (1 Hour) Chart Analysis – Bearish Trend Pattern, Key Resistance Zone, Stochastic Oscillator
Looking at the H1 chart we could see that the price which is moving lower has created a bearish trend pattern which we may consider as evidence of bearish pressure. Generally, after a bearish trend pattern, we may expect correction and then further continuation lower. Currently, it looks like a correction is happening, we also have a potential bearish hidden divergence that is forming at the moment. Also, the Stochastic Oscillator has reached it’s extreme which we may consider as another evidence of bearish pressure. Until the key resistance zone (marked in blue) shown in the screenshot below holds my short term view remains bearish here and I expect further continuation lower.
EURNZD H1 (1 Hour) Chart Current Scenario
Based on the above-mentioned analysis my short term view was bearish here. On the H1 chart, the price has moved perfectly as per my plan. After the bearish trend pattern, the retrace that I was looking for has happened. The price respected the key resistance zone and moved lower exactly as I expected delivering around 400 pips move.
So, traders, this is why I wanted to show this example to help you understand how important it is to follow the facts. 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 majority of the times 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”.
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To your success,
Vladimir Ribakov
Certified Financial Technician
