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 161.8%(0.59745) Fibonacci expansion level of the first wave. The price respected this zone. respected it 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 0.60438 and the second low that has formed at 0.59850 based on the MACD indicator. We also have this bullish divergence on the RSI indicator as well. Also, the price has created higher highs, based on the MACD indicator, we may consider these as signs provided by the market favouring the bulls. So based on all this, my short-term view is bullish here and we may now move down to lower timeframe and look for evidences supporting this bullish view.
On the H1 chart, we could see that 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 is happening. Also, we have a key support zone that has formed, based on the 100%(0.60302) Fibonacci expansion level of the first wave of this correction and the 50%(0.60479) – 61.8%(0.60331) Fibonacci retracement levels of the bullish trend pattern. The price which was moving lower, reached this zone, respected it and is currently bouncing higher from this zone. So based on all this, until the key support zone (marked in green) shown in the image below holds my short-term view remains bullish here. If we get a valid breakout above the most recent downtrend line we may then consider it as a validation for this short-term bullish view and may then expect the price to move higher further.
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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