Hi Traders! EURNZD short term forecast follow up and update is here. On May 4th I shared this “EURNZD Short Term Forecast And Technical Analysis” 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!
Looking at the H4 chart, we could see that the price which is moving higher has reached a key resistance zone formed by the 161.8%(1.63312) Fibonacci expansion level of the first wave and the 61.8%(1.64883) Fibonacci expansion level of the second wave. In addition to this, we have a bearish divergence that has formed between the first high that has formed at 1.63562 and the second high that has formed at 1.64027 based on the MACD indicator which we may consider as evidence of bearish pressure. So everything looks good here for the bears and until the key resistance zone holds my short term view remains bearish here and I expect the price to move lower further.
EURNZD H1(1 Hour) Chart Current Scenario
Based on the above-mentioned analysis my short term view was bearish here and I was expecting the price to move lower further until the key resistance zone holds. The price action followed my analysis exactly as I expected it to here and it moved lower further and delivered around 250 pips move before the price moved higher again.
On the H1 chart, the market provided us with various facts supporting the bearish view. The price which was moving higher reached the key resistance zone again, respected it and moved lower from this zone. In addition to this, the price also created a bearish divergence between the first high that has formed at 1.64027 and the second high that has formed at 1.64215 based on the MACD indicator. The price then moved lower and broke below the most recent uptrend line. We may consider these as facts provided by the market supporting the bearish view and also there we no signs opposing this bearish view. Then as you can see in the image below how the price moved lower further and provided a nice move to the downside.
(Note: You can learn about a Killer Forex Strategy “Double Trend Line Principle” here)
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 to us and took the right action accordingly.
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Traders Academy Club Team