NZDJPY Short Term Forecast Follow Up And Update

Hi Traders! NZDJPY short term forecast follow up and update is here. On July 7th 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

Looking at the H1 chart, we could see that the price which was moving lower created a bullish divergence that has formed between the first low that has formed at 83.151 and the second low that has formed at 83.013 based on the MACD indicator. The price then moved higher and broke above the last high at 83.916 creating higher highs, thus forming a classical setup of bullish divergence followed by bullish convergence, we may consider these as evidences of bullish pressure. Hence as per the book scenario, after a bullish convergence, we may look for corrections to happen and then further continuation to the upside. Currently it looks like a correction is happening. In addition to this, the ADX indicator gave a bullish signal here 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, currently there are no signs opposing this short term bullish view. Until the key support zone shown in the image below (marked in blue) holds my short term view remains bullish here and I expect the price to move higher further.

NZDJPY H1(1 Hour) Chart Current Scenario

In this pair, my short term view was bullish and I was expecting the price to move higher further until the key support zone holds. The price action followed my analysis exactly as I expected it to here. After the bullish convergence we had a pullback with the price creating a bullish hidden divergence between the first low that has formed at 83.013 and the second low that has formed at 83.427 based on the MACD indicator. Also, most importantly the price was holding above the key support zone, we may consider these as facts provided by the market supporting the short term bullish view and also, there were no signs opposing this short term bullish view. The price then moved higher further as I expected it to and delivered around 320 pips move!

On the M15 chart, the market provided us with various facts supporting the bullish view. The price which was moving lower created a bullish divergence between the first low that has formed at 83.474 and the second low that has formed at 83.427 based on the MACD indicator. The price then moved higher and broke above the most recent downtrend line, we may consider these as facts provided by the market supporting the bullish view. Then as you can see in the image below how the price moved higher after that and provided a fantastic move to the upside.
So, traders, this is why I wanted to show this example to help you understand how important it is to follow the facts. The facts were supporting the bullish view here and there were no signs against it. When the facts do happen as we expected you can see how the price perfectly moved as per the plan. Because these are the kind of hints the market provides us at majority of the times and it’s our obligation as traders to be able to listen to these things that the market tells us and we should try to make the right actions accordingly.

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