Hi Traders! NZDJPY forecast follow up and update is here. On February 9th I shared this “NZDJPY Short Term Forecast And Technical Analysis” post in our 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 has created a bullish trend pattern in the form of three higher highs, higher lows, we may consider this as evidence of bullish pressure. Generally, after a bullish trend pattern, we may expect corrections and then potential continuation higher. In addition to this, the ADX indicator gave a bullish signal here as well at the cross of +DI (green line) versus -DI (red line) and the main signal line (silver line) reads value over 25, we may consider this as yet another evidence of bullish pressure. Also, we had two strong resistance zones that has formed and the price which was moving higher has broken above these zones and is holding above them. After the breakout these strong resistance zones are acting as two strong support zones for us. Until both these strong support zones hold my short term view remains bullish here and I expect the price to move higher further.
Based on the above-mentioned analysis, my short term view was bullish here and I was expecting the price to move higher further until the strong support zones hold. The price action followed my analysis exactly as I expected it to here. The pullback that I was looking for happened and the price which was moving lower created a false break of the strong support zone. In addition to this, the price has also created a bullish hidden divergence between the first low that has formed at 75.231 and the second low that has formed at 75.868 based on the MACD indicator, we may consider these as facts provided by the market supporting the bullish view. The price then moved higher as per the plan and has delivered 150+ pips move so far!
As traders we always have two choices, the first one is to fall in love with our analysis and try to convince the market and expect the price to move in the direction as per our wish. The second one is to follow the facts that the market provides us and make the right actions according to that. As you know the first option won’t help us and as you can see in the example above what happened when we followed the facts that the market hinted us and took the right action according to that.
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Happy Trading!
Arvinth Akash
Traders Academy Club Team.
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