Hi Traders! NZDUSD forecast and technical analysis 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! Let’s start our analysis from the highest timeframe which will be the daily chart here.
You can watch the video explanation of this idea here
NZDUSD D1(Daily) Chart Analysis – Bullish Trend Pattern, Key Support Zone, Bullish Divergence
On the daily 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. Currently, it looks like a correction has happened in the form of double wave to the downside. Also while measuring the first wave of this correction using the Fibonacci expansion tool we could see that the 61.8%(0.69945) Fibonacci expansion level coincides with the 50%(0.69875) – 61.8%(0.68750) Fibonacci retracement levels of the bullish trend pattern, which makes this area a key support zone for us. The price which was moving lower reached this key support zone, respected it and is bouncing higher from this zone. We also had a bullish divergence that has formed between the first low that has formed on 25th March 2021 and the second low that has formed on 13th July 2021 based on the MACD indicator which we may consider as another evidence of bullish pressure. We may now move down to lower timeframe and see if we can find evidences supporting this bullish view.
NZDUSD H4(4 Hours) Chart Analysis – Bullish Convergence
On the H4 chart, we have a bullish divergence that has formed between the first low that has formed at 0.69228 and the second low that has formed at 0.69173 based on the MACD indicator. Then the price moved higher and broke above the high at 0.70093 creating higher highs, thus forming a classical setup of bullish divergence followed by bullish convergence. 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. So the bottom line here is that the H4 chart has evidences supporting the bullish view. We may now move down to one more timeframe lower and look for evidences supporting this bullish view.
NZDUSD H1(1 Hour) Chart Analysis – Bullish Trend Pattern, Strong Support Zones
Looking at the H1 chart, we could see that the price which is 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. Currently, it looks like a correction is happening. Also we had two strong resistance zones and the price which was moving higher has broken above both these zones and is holding above them. Currently these two strong resistance zones are acting as two strong support zones for us. Until both these support zones hold my view remains bullish here and I expect the price to move higher further. Alternatively, if the price moves lower and if we get a valid breakout below the low at 0.69173 then this bullish view will be invalidated.
Technical Analysis & Forecast Summary
NZDUSD D1(Daily) Chart Analysis
- Bullish Trend Pattern, Key Support Zone, Bullish Divergence
NZDUSD H4(4 Hours) Chart Analysis
- Bullish Convergence
NZDUSD H1(1 Hour) Chart Analysis
- Bullish Trend Pattern, Strong Support Zones
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 buy setup then you can use any setup and strategy that you have in your arsenal to look for bullish moves and join this buy trade.
Also, don’t forget to protect your buy trade using a stop loss and make sure to set a target and keep a proper risk/reward ratio.
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To your success,
Vladimir Ribakov
Certified Financial Technician
