Hi Traders! EURUSD short term forecast follow up and update is here. On August 18th I shared this “Technical Analysis – EURUSD 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
On the H1 chart, based on the Heikin Ashi candles we can see that currently, we have strong bearish bodies in downward moving market conditions so it basically reflects a bearish environment. In addition to this, the price which is moving lower has created a bearish trend pattern in the form of three lower highs, lower lows which we may consider as evidence of bearish pressure. Generally, after a bearish trend pattern, we may expect corrections and then further continuation lower. Currently it looks like a correction is happening. Also, we had two strong support zones that has formed and the price which was moving lower has broken below these zones and is holding below them, we may consider this as yet another evidence of bearish pressure. Currently, these strong support zones are acting as strong resistance zones for us. Until these two strong resistance zones hold my short term view remains bearish here and I expect the price to move lower further.
EURUSD H1(1 Hour) Chart Current Scenario
In this pair my short term view was bearish and I was expecting the price to move lower further until the two strong resistance zones hold. The price action followed my analysis exactly as I expected it to here. After the bearish trend pattern, the price which was moving higher reached the first strong resistance zone, respected it and then it bounced lower from this zone. The price then moved lower further and has delivered 280+ pips move to the downside as you can see in the image below!
On the M15 chart, the market provided us with various facts supporting the bearish view. After the bearish trend pattern on the H1 chart, the correction that we were looking for happened in the form of double wave to the upside on the M15 chart. Also, the price which was moving higher created a bearish divergence between the first high that has formed at 1.01946 and the second high that has formed at 1.02028 based on the MACD indicator. The price then moved lower and broke below the most recent uptrend line, we then had a pullback and then the price moved lower further. 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 after that and provided an amazing move to the downside!
(Note: You can learn about a Killer Forex Strategy “Double Trend Line Principle” here)
So, traders, this is why I wanted to show this example to help you understand how important it is to follow the facts. The facts were supporting the bearish view here and there were no signs against it. When the facts do happen as we expected you can see how the price perfectly moved as per the plan. Because these are the kind of hints the market provides us at majority of the times and it’s our obligation as traders to be able to listen to these things that the market tells us and we should try to make the right actions accordingly.
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Happy Trading!
Arvinth Akash
Traders Academy Club Team.
