Hi Traders! NZDUSD forecast follow up and update is here. On July 6th I shared this “NZDUSD 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 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. Currently it looks like a correction is happening. Also, while measuring the first wave of this correction using the Fibonacci expansion tool, we could see that the 100%(0.71188) Fibonacci expansion level of this first wave coincides with a strong resistance zone which makes this a key resistance zone for us. Also, we could see that the 161.8%(0.72248) Fibonacci expansion level of this first wave and the daily downtrend line coincides with the second resistance zone which makes this area a second key resistance zone for us. Until both these key resistance zones hold my view remains bearish here and I expect the price to move lower further.
On the H4 chart my view was bearish and I was expecting the price to move lower further until the key resistance zones hold. The price action followed my analysis exactly as I expected it to here. The price which was moving higher reached the first key resistance zone, respected it and moved lower from this zone. The price then moved lower further as I expected it to and delivered 110+ pips move so far.
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