Hi Traders! Today I share with you my NZDCAD forecast and technical analysis. The way I would like to analyze the chart for setups is based on multi-timeframe confirmations because in my POV if we get more evidences on different timeframes for the same direction then it makes the setup much more reliable. 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! Let’s start our analysis now from the daily chart.
NZDCAD D1(Daily) Chart Analysis – Uptrend Line Breakout, Bearish Hidden Divergence, ADX Indicator, Parabolic Sar
On the daily chart, we had a bullish rally that has completed itself and currently, it looks like a correction is happening in the form of double wave down. We have the first leg down followed by a pullback with a bearish hidden divergence that has formed between the first high that has formed on 31st July 2020 and the second high that has formed on 2nd September 2020 based on the histogram of the MACD indicator which we may consider as evidence of bearish pressure. We then had a continuing bearish divergence that has formed between the first high that has formed on 2nd September 2020 and the second high that has formed on 18th September 2020 based on the histogram of the MACD indicator which we may consider as yet another evidence of bearish pressure. In addition to this, the ADX indicator gave a bearish signal here at the cross of -DI (red line) versus +DI (green line), and the main signal line (silver line) reads value over 25. Also based on the Parabolic Sar the dots are above the price, we may consider these as other evidences of bearish pressure. We may now move down to lower timeframe and see if we can find evidences supporting this bearish view.
NZDCAD H4(4 Hours) Chart Analysis – Uptrend Line Breakout, Key Resistance Zone, Stochastic Oscillator
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.
Technical Analysis & Forecast Summary
NZDCAD D1(Daily) Chart Analysis
- Uptrend Line Breakout, Bearish Hidden Divergence, ADX Indicator, Parabolic Sar
NZDCAD H4(4 Hours) Chart Analysis
- Uptrend Line Breakout, Key Resistance Zone, Stochastic Oscillator
Trading Tips
It is always recommended to look for confirmations before you jump into any trade. If you are not sure about how to trade this sell setup then you can use any setup and strategy that you have in your arsenal to look for bearish moves and join this sell trade.
Also don’t forget to protect your sell trade using a stop loss and make sure to set a target and keep a proper risk/reward ratio.
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To your success,
Vladimir Ribakov
Certified Financial Technician
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