Hi Traders! EURNZD short term forecast update and follow up is here. On May 12th 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!
My Idea
On the H1 chart too, we have a bearish divergence that has formed between the first high that has formed at 1.68005 and the second high that has formed at 1.68412 based on the MACD indicator which we may consider as evidence of bearish pressure. In addition to this, the ADX indicator gave a bearish signal here as well at the cross of -DI (red line) versus +DI (green line) and the main signal line (silver line) reads value over 25 which we may consider as another evidence of bearish pressure. So everything looks good here for the bears here and if the price breaks below the low at 1.65663 with momentum we may then consider it as a validation for this short term bearish view and may expect the price to move lower further.
In this pair my short term view was bearish and I was expecting the price to move lower further until the key resistance zone holds. On the H1 chart, the price action followed my analysis exactly as I expected it to and moved lower as per the plan. The validation for the short term bearish view which is a valid breakout below the low at 1.65663 happened as I expected it to. We then had a pullback and then the price moved lower further and delivered 310+ pips move to the downside!
On the M15 chart the market provided us with various facts supporting this short term bearish view. After the breakout below the low at 1.65663 we had a pullback. The price which was moving higher reached a strong resistance zone with the price creating a bearish hidden divergence between the first high that has formed at 1.68412 and the second high that has formed at 1.66816 based on the MACD indicator. We may consider these as facts provided by the market supporting the bearish view. The price then moved lower further and delivered an excellent move to the downside as you can see in the image below!
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 a perfect example of this scenario.
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Happy Trading!
Arvinth Akash
Traders Academy Club Team.
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