Hi Traders! NZDJPY short term forecast follow up and update is here. On September 14th I shared this “NZDJPY Technical Analysis And Short Term Forecast” 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 H1 chart, based on the Heikin Ashi candles we can see that currently, we have strong bearish bodies in downward moving market conditions so it basically reflects a bearish environment. In addition to this, the price which is moving lower has created a bearish trend pattern in the form of three lower highs, lower lows which we may consider as evidence of bearish pressure. Generally, after a bearish trend pattern, we may expect corrections and then further continuation lower. Also, the ADX indicator gave a bearish signal here as well at the cross of -DI (red line) versus +DI (green line) and the main signal line (silver line) reads value over 25 which we may consider as yet another evidence of bearish pressure. So based on all this, until the key resistance zone (marked in red) shown in the image below holds my short term view remains bearish here and I expect the price to move lower further after pullbacks.
Based on the above-mentioned analysis, on the H1 chart, my short term view was bearish here and I was expecting the price to move lower further until the key resistance zone holds. The price action followed my analysis exactly as I expected it to here. After the bearish trend pattern the pullback that I was looking for happened and then the price moved lower further and delivered an extraordinary 570+ pips move to downside!
We had various facts supporting the bearish view on the M15 chart. We had a flat correction in the form of a range and also we had a bearish divergence between the first high that has formed at 86.073 and the second high that has formed at 86.354 based on the histogram of the MACD indicator. The price then moved lower and broke below the bottom of this range. We may consider these as hints provided by the market supporting the bearish view. We then had a pullback and then the price moved lower further and provided an extraordinary move to the downside as you can see in the image below.
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 to 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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