GBPNZD Short Term Forecast Update And Follow Up

Hi Traders! GBPNZD short term forecast update and follow up is here. On April 18th 2023 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 Home Trader Club  Spoiler alert – free memberships are available!

My Idea

On the H1 chart, the price which was moving higher has created a bearish divergence between the first high that has formed at 2.00882 and the second high that has formed at 2.01288 based on the MACD indicator. The price then moved lower and broke below the last low at 1.99664 thus forming a classical setup of bearish divergence followed by bearish convergence, we may consider these as evidences of bearish pressure. In addition to this, the price has also broken below the most recent uptrend line which we may consider as another evidence of bearish pressure. Generally, after a bearish convergence we may look for corrections and then further continuation lower. Currently, it looks like a correction is happening and in addition to this, the price has created a bearish hidden divergence that has formed between the first high that has formed at 2.01288 and the second high that has formed at 2.00232 followed by a regular bearish divergence between the first high formed at 2.00232 and the second high that has formed at 2.00950 based on the MACD indicator which we may consider as yet another evidence of bearish pressure. So everything looks good here for the bears and until the strong resistance zone (marked in red) shown in the image below holds my short term view remains bearish here and I expect the price to move lower further.

 

 

 

GBPNZD H1(1 Hour) Chart Current Scenario

Based on the above mentioned analysis my short term view was bearish here and I mentioned that until the strong resistance zone holds I expect the price to move lower further. The price action didn’t follow my analysis here and this idea failed. After the bearish convergence I was expecting the price to move lower further after pullbacks but the price moved higher, broke above the strong resistance zone and was holding above it, thus invalidating this short term bearish view.

 

 

So traders, this is why I wanted to show this example to help you understand why we should always trade based on the facts and hints provided by the market and take the right actions according to that. Even though we had facts supporting the bearish view here, the price moved higher, broke above the invalidation level (strong resistance zone) and was holding above it which we may consider as a fact provided by the market opposing this bearish view. Also, you should keep in mind that losses are part of trading we can’t expect every trade to go as per our plan and provide us profits. In trading, we can’t avoid losses but in order to be successful in trading, we should know how to cut losses early and how to manage the trade when the price goes in the opposite direction.

Note: You can watch the webinar on how to cut losses early here

Not sure how to enter a trade? Spot reversals (bounces)? Not sure how to spot breakouts?

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Happy Trading!

Arvinth Akash
Home Trader Club Team.