Hi Traders! EURNZD short term forecast update and follow up is here. On May 1st, 2024 I shared this “EURNZD 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 H1 chart, based on the Heikin Ashi candles we can see that currently, we have strong bullish bodies in upward moving market conditions so it basically reflects a bullish environment. In addition to this, the price has broken above the most recent downtrend line and is holding above it, which we may consider as evidence of bullish pressure. Also, we could see that the price which is moving higher has created higher highs based on the MACD indicator, which is another sign of gaining momentum towards the bullish side. In addition to this, the ADX indicator gave a bullish signal here at the cross of +DI (green line) versus -DI (red line) and the main signal line (silver line) reads value over 25, we may consider this as yet another evidence of bullish pressure. Also, currently, there are no signs opposing this bullish view. So everything looks good here for the bulls and until the strong support zone (marked in green) shown in the image below holds my short-term view remains bullish here and I expect the price to move higher further after pullbacks.
EURNZD H1(1 Hour) Chart Current Scenario
Based on the above-mentioned analysis my short-term view was bullish here and until the strong support zone holds I was expecting the price to move higher further after pullbacks. The price action didn’t follow my analysis here and this idea failed. After the higher highs, the price which was moving lower reached the strong support zone but the price didn’t hold in this zone as I expected it to. The price moved lower further and we got a valid breakout below this strong support zone thus invalidating the bullish view here. In addition to this the price has also created a bearish trend pattern in the form of three lower highs and lower lows, which is another sign opposing this bullish view. So based on all this my current view on EURNZD 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 bullish view, the price didn’t hold in the support zone as I expected it to and the price broke below it, which is a contradictory sign provided by the market opposing the bullish view. In addition to this, the price has also created a bearish trend pattern which is yet another contradictory sign provided by the market opposing the bullish 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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Happy Trading!
Arvinth Akash
Home Trader Club Team.
