Hi Traders! NZDCHF technical analysis and forecast 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
On the daily chart, the price which is moving higher has reached a key resistance zone formed by the 100% (0.64275) Fibonacci expansion level of the big wave and the 100%(0.64572) Fibonacci expansion level of the small wave we have. The price has currently created a false break of this key resistance zone which we may consider as evidence of bearish pressure. Also, we have a bearish divergence that has formed between the first high that has formed at 0.63874 and the second high that has formed at 0.65014 based on the MACD indicator which we may consider as evidence of bearish pressure. We may now move down to one timeframe lower and see if we can find evidences supporting this bearish view.
NZDCHF H4(4 Hours) Chart Analysis – ADX Indicator, Bearish Convergence
On the H4 chart, 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 evidence of bearish pressure. Also, the price has created a bearish divergence between the first high that has formed at 0.64976 and the second high that has formed at 0.65014 based on the MACD indicator. Then the price moved lower and broke below the low at 0.64661 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 are looking for is happening. Until the daily 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
NZDCHF H4(4 Hours) Chart Analysis
- ADX Indicator, Bearish Convergence
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
