Hi Traders! NZDCAD forecast update follow up is here. On March 16th I shared this “NZDCAD Technical Analysis And Forecast” post in my 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 H4 chart, the price which is moving lower has created a bearish trend pattern in the form of three lower highs, lower lows and it looks like this bearish trend pattern has completed itself. Generally, after a bearish trend pattern, we may expect corrections and then further continuation lower. Currently, it looks like the correction that we are looking for is happening. While looking at the Stochastic Oscillator we could see that the price has reached its extreme which we may consider as evidence of bearish pressure. Also, 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, we may consider this as another evidence of bearish pressure. Also, we have a strong support zone that has formed and the price which is moving lower has broken below this zone and is holding below it. Currently, this strong support zone is acting as a strong resistance zone for us. Until this strong resistance zone holds my view remains bearish here and I expect the price to continue lower further after correction
NZDCAD H4(4 Hours) Chart Current Scenario
Based on the above-mentioned analysis my view was bearish here and I was expecting the price to move lower further after correction until the strong resistance zone holds. The price action followed my analysis exactly as I expected it to, we had a flat correction in the form of a range. The price then moved lower and broke below the bottom of this range which we may consider as a fact provided by the market supporting the bearish view. Then the price moved lower further delivering 180+ pips move so far.
Currently, on the H4 chart, we have a potential bullish divergence in play this is something that we need to pay attention to. So if you are still involved in the sells then this is a good place to consider managing your trade and secure your profits (cash out or partial cash out or trailing protections or partial hedge, etc.. depending on the strategy that you work with).
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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 us and took the right action according to that.
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Happy Trading!
Yordan Kuzmanov
Chief Trader at the Traders Academy Club
