Hi Traders! NZDCAD forecast and technical analysis 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 Traders Academy Club Spoiler alert – free memberships are available! Let’s start our analysis from the highest timeframe which will be the daily chart here.
You can watch the video explanation of this idea here
NZDCAD D1(Daily) Chart Analysis – Key Support Zone, Bullish Divergence, ADX Indicator
On the daily chart, the price which is moving lower has reached a key support zone formed by the 100%(0.84956) Fibonacci expansion level of the first wave and the 61.8%(0.85751) Fibonacci expansion level of the second wave. The price respected this key support zone and is currently bouncing higher from this zone. We also had a bullish divergence that has formed between the first low that has formed at 0.87415 and the second low that has formed at 0.85990 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. We may now move down to lower timeframe and see if we can find evidences supporting this bullish view.
NZDCAD H4(4 Hours) Chart Analysis – Bullish Convergence, Bullish Trend Pattern, Strong Support Zone
On the H4 chart, we have a bullish divergence that has formed between the first low that has formed at 0.86305 and the second low that has formed at 0.85990 based on the MACD indicator. Then the price moved higher and broke above the high at 0.87484 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. Also we could see that 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. Currently, it looks like a correction is happening and until the strong support zone shown in the image below(marked in blue) holds my view remains bullish here and I expect the price to move higher further. Alternatively if the price moves lower and if we get a valid breakout below the low at 0.85990 then this bullish view will be invalidated.
Technical Analysis & Forecast Summary
NZDCAD D1(Daily) Chart Analysis
- Key Support Zone, Bullish Divergence, ADX Indicator
NZDCAD H4(4 Hours) Chart Analysis
- Bullish Convergence, Bullish Trend Pattern, Strong Support Zone
Trading Tips
It is always recommended to look for confirmations before you jump into any trade. If you are not sure about how to trade this 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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To your success,
Vladimir Ribakov
Certified Financial Technician
