Hi Traders! EURNZD short term forecast update and follow up is here. On September 7th 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!
Looking at the H4 chart, currently it looks like a correction is happening in the form of potential double wave down. Also, we have a key support zone that has formed based on the 61.8%(1.81826) – 100%(1.80623) Fibonacci expansion level of the first wave. The price which was moving lower, reached this key support zone, respected it and is currently bouncing higher from this zone. Also, we have a bullish divergence that has formed between the first low that has formed on 23rd August 2023 and the second low that has formed on 1st September 2023 based on the MACD indicator which we may consider as evidence of bullish pressure. We also have this bullish divergence on the RSI indicator as well, which we may consider as yet another evidence of bullish pressure. In addition to this, currently there are no signs opposing this short term bullish view. So based on all this, until the key holds my short term view remains here. A valid breakout above the most recent downtrend line would be the validation for this short term view.
EURNZD H4(4 Hours) Chart Current Scenario
In this pair based on the above-mentioned analysis my short term view was bullish until the key support zone holds. Also, I mentioned that “A valid breakout above the most recent downtrend line would be the validation for thisview”. The validation for the bullish view which is a valid breakout above the most recent downtrend line didn’t happen here. Alternatively, the price moved lower and we got a valid breakout below the key support zone, thus invalidating this bullish view.
Even though we had facts supporting the bullish view here, the validation for the bullish view which is a valid breakout above the most recent downtrend line didn’t happen here. Alternatively, the price moved lower and we got a valid breakout below the key 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 EURNZD short term forecast is yet another good example of this scenario.
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