Hi Traders! NZDCAD forecast update and follow up is here. On September 23rd I shared this “Technical Analysis – NZDCAD Forecast” 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 was moving higher reached the 61.8%(0.89168) fibonacci expansion level of the first wave, respected it, and has bounced lower from this zone. Also, 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. So in my POV until the strong resistance zone shown in the screenshot below holds my view remains bearish here and I expect the price to continue lower further.
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 continue lower further until the strong resistance zone holds. We got a pullback here and the price which was moving higher reached the strong resistance zone, respected it, and bounced lower from it. In addition to this, we also had a bearish hidden divergence that had formed between the first high that has formed at 0.89382 and the second high that has formed at 0.88461 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. The price then moved lower further and delivered 160+ 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 bearish hidden divergence and the most recent uptrend line breakout which acted as evidences of bearish pressure. Also there were no contradictory signs and the strong 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
