Hi Traders! Oil short term forecast follow up and update is here. On April 12th I shared this “Oil Short Term 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 H1 chart too we have a bullish divergence that has formed between the first low that has formed at 95.234 and the second low that has formed at 92.626 based on the MACD indicator which we may consider as evidence of bullish pressure. 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. Until the key support zone (marked in blue) shown in the image below holds my short term view here is bullish. If we get a valid breakout above the high at 98.153 we may then consider it as a validation for the bullish view and may expect the price to move higher further in the short term.
Oil H1(1 Hour) Chart Current Scenario
In this pair based on the above-mentioned analysis, my short term view was bullish here and I was expecting the price to move higher further until the key support zone holds. Also, I mentioned that “If we get a valid breakout above the high at 98.153 we may then consider it as a validation for the bullish view and may expect the price to move higher further”. The price action followed my analysis exactly as I expected it to here. The validation for the bullish view which is a valid breakout above the high at 98.153 happened as I expected it to, then the price moved higher further and delivered a fantastic move to the upside.
On the M15 chart, the market provided us with various facts supporting the bullish view. After the breakout above the high at 98.153, we had a pullback and the price which was moving lower created a bullish divergence between the first low that has formed at 99.522 and the second low that has formed at 99.391 based on the MACD indicator. The price then moved higher and broke above the most recent downtrend line, we may consider these as facts provided by the market supporting the bullish view. Then as you can see in the image below how the price moved higher after that and provided a fantastic move to the upside.
(Note: You can learn about a Killer Forex Strategy “Double Trend Line Principle” here)
So, traders, this is why I wanted to show this example to help you understand how important it is to follow the facts. The facts were supporting the bullish view here and there were no signs against it. When the facts do happen as we expected you can see how the price perfectly moved as per the plan. Because these are the kind of hints the market provides us at majority of the times and it’s our obligation as traders to be able to listen to these things that the market tells us and we should try to make the right actions.
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Happy Trading!
Arvinth Akash
Traders Academy Club Team.