Hi Traders! NZDUSD technical analysis and short term forecast 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 Home Trader Club Spoiler alert – free memberships are available! Let’s start our analysis from the highest timeframe which will be the H4 chart here.
On the H4 chart, the price which was moving lower reached a key support zone. This key support zone is formed by the 100%(0.61170) Fibonacci expansion level of the first wave. The price respected this zone and bounced higher from this zone. Also, 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 0.61262 and the second low that has formed at 0.61116 based on the MACD indicator. The price then moved higher and broke above the last high at 0.61870 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. In addition to this, based on the Parabolic Sar we could see that the dots are below the price which we may consider as yet another evidence of bullish pressure. Also, currently, there are no signs opposing this short term bullish view. So everything looks good here for the bulls and we may now move down to lower timeframe and look for evidence supporting this short-term bullish view.
On the H1 chart, 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. 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. Currently, it looks like a correction is happening, also we had two strong resistance zones that has formed and the price which was moving higher has broken above these zones and is holding above them. After the breakout these strong resistance zones are acting as two strong support zones for us. Until both these strong support zones shown in the image below(marked in green) holds my short term view remains bullish here and I expect the price to move higher further after pullbacks.
NZDUSD H4(4 Hours) Chart Analysis
NZDUSD H1(1 Hour) Chart Analysis
It is always recommended to look for confirmations before you jump into any trade. If you are not sure about how to trade this short-term 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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Happy Trading!
Arvinth Akash
Home Trader Club Team
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