Hi Traders! EURNZD short term forecast update and follow up is here. On October 26th 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 Traders Academy Club. Spoiler alert – free memberships are available!
My Idea
Looking at the H1 chart, we could see that the price has broken above the last high at 1.73528 and has created higher highs.which is a sign of gaining momentum towards the bullish side. In addition to this, based on the Stochastic Oscillator we could see that the price has reached its extreme, which we may consider as yet another evidence of bullish pressure. Currently it looks like a correction is happening. Also, while measuring the legs, we have two key support zones that has formed. The first key support zone is formed based on the 100%(1.72312) Fibonacci expansion level of the first wave and the 100%(1.72356) Fibonacci expansion level of the second wave. The second key support zone is formed based on the 161.8%(1.71427) Fibonacci expansion level of the first wave the 161.8%(1.71333) Fibonacci expansion level of the second wave. The price which was moving lower, has currently reached the first key support zone. So based on all this, until the key support zones hold my short term view remains bullish here. A valid breakout above the most recent downtrend line would be the validation for this bullish view.
EURNZD H1(1 Hour) Chart Current Scenario
In this pair based on the above-mentioned analysis my short term view was bullish until the two key support zones hold. Also, I mentioned that “A valid breakout above the most recent downtrend line would be the validation for this bullish view”. 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 second key support zone as well, 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 second 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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Happy Trading!
Arvinth Akash
Traders Academy Club Team
