Hi Traders! GBPNZD short term forecast follow up and update is here. On December 1 st I shared this “Technical Analysis – GBPNZD 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 the H1 chart, we could see that the price which is moving higher has created a bearish divergence between the first high that has formed at 1.96066 and the second high that has formed at 1.96322 based on the MACD indicator, which we may consider as evidence of bearish pressure. The price then moved lower and broke below the last low at 1.94836 thus creating lower lows, which we may consider as another evidence of bearish pressure. Also, we should note that the price which was creating series of higher highs, higher lows structure so far in recent times has created lower lows for the first time which we may consider as another sign favoring the bears. So basically, I expect the price to move lower further in the short term here until the strong resistance zone (marked in red) holds.
GBPNZD H4(4 Hours) Chart Current Scenario
In this pair, based on the above-mentioned analysis my short term view was bearish and I was expecting the price to move lower further until the strong resistance zone holds. After the bearish divergence and lower lows the price which was moving higher broke above the last high but it was still holding in the strong resistance zone. The price respected this zone and then it moved lower as I expected it to and has delivered around 330+ pips move. You can see this move clearly on the H4 chart below.
On the M15 chart, the market provided us with various facts supporting the bearish view. The price which was moving higher created multiple false breaks with a bearish divergence between the first high that has formed at 1.96584 and the second high that has formed at 1.96905 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 wonderful 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 according to that.
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If you have any further questions, don’t hesitate to drop a comment below!
Happy Trading!
Arvinth Akash
Traders Academy Club Team
