Hi Traders! EURNZD forecast update and follow up is here. On July 15th I shared this EURNZD Technical Analysis And Forecast post 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 H1(1 Hour) Chart
In this pair my view was bullish and I mentioned in my analysis that “Currently it looks like a correction is happening and until the important support zone (marked in blue rectangle) shown in the screenshot below holds my view remains bullish here”.
EURNZD H1(1 Hour) Chart Current Scenaio
On the H1 chart, the correction happened in the form of two waves and the price reached the important support zone and respected it. We also had bullish divergence between the first low that has formed at 1.73867 and the second low that has formed at 1.73413 based on the histogram of the MACD indicator. The price then moved higher delivering 150+ pips move. We also had another fact supporting this bullish view in the form of the most recent downtrend line breakout.
We then had bearish divergence on the H4 chart which is an opposite evidence and the price moved lower after that. When you are involved in a trade pay attention to the contradictory signs. When you find one just like this bearish divergence for example here (in the current trading timeframe or higher timeframes), then the best way is not to stay in that trade and pray for the market to still work as you wish. Small profit or big profit or small loss or break even when you find contradictory signs just step back because these are way better than a big loss. So you should keep this in mind when you are involved in a trade.
So in this setup, the market hinted at us with various facts supporting the bullish view. As you can see the important support zone was holding, the price reached this zone and respected it. The correction happened in the form of a double wave down with bullish divergence between the two waves. And then the price which was moving higher broke above the most recent downtrend line, retested it and moved higher further. Most importantly there were no facts supporting the bearish view until the H4 bearish divergence came into play.
As traders we always have two choices, the first one is to fall in love with our analysis and try to convince the market and expect the price to move in the direction as per our wish. The second one is to follow the facts that the market provides us and make the right actions according to that. As you know the first option won’t help us and as you can see in the example above what happened when we followed the facts that the market hinted us and took the right action according to that.
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To your success,
Vladimir Ribakov
