Hi Traders! NZDCAD forecast update and follow up is here. On October 14th I shared this “NZDCAD Forecast And Technical Analysis” 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 broken below the most recent uptrend line which we may consider as evidence of bearish pressure. In addition to this, we had a strong support zone and the price which is moving lower has broken below this strong support zone and is holding below it. Currently, this support zone acts as a strong resistance zone for us, we also have the 200 moving averages coinciding on the same level which makes this area a key resistance zone for us. Also based on the Stochastic Oscillator we could see that the price has reached its extreme, we may consider this as yet another evidence of bearish pressure. So based on all this, my view here is bearish and I expect the price to continue lower further until this key resistance zone holds.
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 until the key resistance zone holds. The price which was moving higher reached this key resistance zone, respected it, and bounced lower as I expected it to. The market provided us with various facts supporting the bearish view here. The first one we had here is the false break of the previous high at 0.87542 with the continuing bearish divergence that has formed between the first high that has formed on 9th October 2020 and the second high that has formed on 14th October 2020 based on the MACD indicator. We also had the breakout of the most recent uptrend line and the price moved lower further as I expected and delivered around 130+ pips move so far.
(Note: You can learn about a Killer Forex Strategy “Double Trend Line Principle” here)
Currently, on the H4 chart, we have a potential bullish divergence that is forming at the moment, 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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This is a good example of how the market provided us with hints supporting the bearish view. As you can see in the example above the market provided us with hints in the form of a false break with bearish divergence, and the most recent uptrend line breakout on the H4 chart which acted as evidences of bearish pressure. Also, there were no contradictory signs and the key resistance zone was holding. Then as you can see in the screenshot above how the price moved lower after that. This is why I always say that as traders we should follow the facts and hints that the market provides us and take the right action.
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To your success,
Vladimir Ribakov
Certified Financial Technician
