Hi Traders! NZDCHF forecast and technical analysis post is here. 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! here). Now, let’s start our analysis from the highest timeframe which will be the daily chart here.
NZDCHF D1(Daily) Chart Analysis – Key Resistance Zone, Bearish Divergence, RSI Indicator
On the daily chart, the price which is moving higher has reached a key resistance zone formed by the 100% (0.64413) Fibonacci expansion level of the first wave and the 100%(0.64462) Fibonacci expansion level of the second wave we have. The price respected this key resistance zone and is currently bouncing lower. In addition to this, we have a bearish divergence that has formed between the first high that has formed on 1st December 2020 and the second high that has formed on 8th January 2021 based on the MACD indicator which we may consider as evidence of bearish pressure. Also, we have an uptrend line breakout based on the RSI indicator which we may consider as another evidence of bearish pressure. We may now move down to a lower timeframe and see if we can find evidences supporting this bearish view.
NZDCHF H4(4 Hours) Chart Analysis – Bearish Convergence, ADX Indicator
On the H4 chart, the price has created a bearish divergence between the first high that has formed at 0.64061 and the second high that has formed at 0.64311 based on the MACD indicator. Then the price moved lower and broke below the low at 0.63429 creating lower lows, thus forming a classical setup of bearish divergence followed by bearish convergence. Hence as per the book scenario, after a bearish convergence, we may look for possible corrections and then further continuation to the downside. Currently, it looks like the correction that we were looking for is happening. In addition to this, the ADX indicator gave a bearish signal 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. Until the key resistance zone holds my view remains bearish here and I expect the price to move lower further.
Technical Analysis & Forecast Summary
NZDCHF D1(Daily) Chart Analysis
- Key Resistance Zone, Bearish Divergence, RSI Indicator
NZDCHF H4(4 Hours) Chart Analysis
- Bearish Convergence, ADX Indicator
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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Happy Trading!
Yordan Kuzmanov
Chief Trader at the Traders Academy Club
