Hi Traders! GBPNZD short term forecast follow up and update is here. On October 13th I shared this “GBPNZD 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
Looking at the H4 chart, currently it looks like a correction is happening in the form of double wave down. Also, we have a key support zone that has formed based on the 61.8%(1.96071) – 100%(1.94131) 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 6th October 2022 and the second low that has formed on 12th October 2022 based on the histogram of the MACD indicator which we may consider as evidence of bullish pressure. So based on all this, until the key support zone holds my short term view remains bullish here. A valid breakout above the most recent downtrend line would be the validation for this bullish view.
GBPNZD H1(1 Hour) Chart Current Scenario
Based on the above-mentioned analysis my short term view was bullish here and I was expecting the price to move higher further until the key support zone holds. Also, I mentioned that “If we get a valid breakout above the most recent downtrend line we may then consider it as a validation for this bullish view”. The price action followed my analysis exactly as I expected it to here, the validation for the bullish view which is a valid breakout above the downtrend line happened and then the price moved higher further and delivered 480+ pips move before it was blocked by a bearish divergence.
(Note: You can learn about a Killer Forex Strategy “Double Trend Line Principle” here)
On the M15 chart, the market provided us with various facts supporting the bullish view. After the breakout above the H4 downtrend line, we had a pullback on the M15 chart with the price creating a bullish divergence between the first low that has formed at 2.00445 and the second low that has formed at 1.98696 based on the MACD indicator. The price then moved higher and broke above the most recent downtrend line. We may consider these as facts provided by the market supporting the bullish view. Also there were no signs opposing this bullish view. Then as you can see in the image below how the price moved higher further and provided a fantastic move to the upside!
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 GBPNZD short term forecast is yet another good example of this scenario.
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Happy Trading!
Arvinth Akash
Traders Academy Club Team
