Hi Traders! NZDUSD forecast update and follow up is here. On September 15th I shared this “NZDUSD Technical Analysis And 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 H4 chart, we could see that currently it looks like a flat correction is happening in the form of a range. While measuring the first wave inside this range we have two key support zones that has formed. The first key support zone is formed by the 61.8%(0.70972) – 100%(0.70609) Fibonacci expansion levels of the first wave and the bottom of the range. The second key support zone is formed by the 161.8%(0.70023) Fibonacci expansion level of the first wave. The price has currently reached the first key support zone and also we have a bullish divergence that has formed between the first low that has formed at 0.70759 and the second low that has formed at 0.70730 based on the MACD indicator which we may consider as evidence of bullish pressure. Until both the key support zones hold my view remains bullish here. If the price breaks and holds above the top of this range we may then consider it as validation for the bullish view and may expect the price to move higher further.
NZDUSD H4(4 Hours) Chart Current Scenario
In this pair based on the above-mentioned analysis, my view was bullish here and I was expecting the price to move higher further until the key support zones hold. Also, I mentioned that “if the price breaks and holds above the top of the range we may then consider it as validation for the bullish view and may expect the price to move higher further”. The price action didn’t follow my analysis here, the validation for the bullish view which is a valid breakout above the top of the range didn’t happen and the price moved lower and broke below the second key support zone and held below it, thus invalidating the bullish view. My current view on this pair is neutral.
Even though we had facts supporting the bullish view here, the validation for the bullish view which is a valid breakout above the top of the range didn’t happen here. The price which bounced higher from the key support zone didn’t break above the top of the range. Then as you can see in the image above how the price moved lower further and broke below the second key support zone after that, thus invalidating this bullish view. This is why we should always trade based on the facts and hints provided by the market and take the right actions according to that.
So traders, when it comes to trading, there are various important factors that we need to pay attention to, just because we have a good setup doesn’t mean that we can enter the trade randomly and it will pay us huge profits. First of all, we need to validate the entry and we should have a perfect entry plan to get into the trade which is a key factor when it comes to trading. This NZDUSD forecast is yet another good example of this scenario.
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Happy Trading!
Arvinth Akash
Traders Academy Club Team
