Hi Traders! NZDCAD forecast follow up and update is here. On May 13th I shared this “NZDCAD Forecast And Technical Analysis”. 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!
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Now, let’s summarize the idea first:
NZDCAD D1(Daily) Chart Analysis – Psychological Level, Parabolic Sar, Volumes Indicator
On the daily chart, the price which is moving higher is nearing the psychological level 0.86000 and is holding below it. Currently, it looks like the bulls are running out of gas as the momentum is slowing down and we don’t have any evidences supporting the bullish view. In addition to this based on the Parabolic Sar the dot is above the price which we may consider as evidence of bearish pressure. Also based on the Volumes indicator we could see that the volumes are dropping which we may consider as another evidence of bearish pressure. We may now move down to a lower timeframe and see if we have evidences supporting this bearish view.
NZDCAD H4(4 Hours) Chart Analysis – Triangle Pattern, Key Resistance Zone, Bearish Divergence
On the H4 chart, we have a triangle pattern that has formed and the price was moving inside this pattern. The price which was respecting this pattern so far reached a key resistance zone formed by the top of the triangle pattern, psychological level 0.86000, 61.8% fibonacci expansion level of the big first wave at 0.85994, and the 100% fibonacci expansion level of the small first wave at 0.85990. The price respected this key resistance zone and it bounced lower. Currently, the price has broken below the bottom of the triangle pattern which we may consider as evidence of bearish pressure. In addition to this, the last divergence we had is a bearish divergence that had formed between the first high that has formed on 31st March 2020 and the second high that has formed on 30th April 2020 based on the MACD indicator which we may consider as another evidence of bearish pressure. So the bottom line here is that the H4 chart has evidences supporting the bearish view and until the key resistance zone holds my view remains bearish here.
NZDCAD H1(1 Hour) Chart Current Scenario
So based on the above-mentioned analysis, my view was bearish here. On the H1 chart, the price moved perfectly as per my analysis. After the breakout of the triangle pattern, the price moved higher, retested the breakout, and then it moved lower exactly as I expected delivering 80+ pips so far.
So, traders, this is why I wanted to show this example to help you understand how important it is to follow the facts. 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.
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To your success,
Vladimir Ribakov
Certified Financial Technician
