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NZDCAD H4 (4 Hours) Chart Analysis – Key Support Zone, Bullish Convergence, Stochastic Oscillator
On the H4 chart, the price which was moving lower reached a key support zone that has formed based on the 100%(0.80848) Fibonacci expansion level of the first wave and the 61.8%(0.80677) Fibonacci expansion level of the second wave. The price respected this key support zone and bounced higher from this zone. In addition to this, 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 0.80740 and the second low that has formed at 0.80289 based on the MACD indicator. The price then moved higher and broke above the last high at 0.81840 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. Also, based on the Stochastic Oscillator we could see that the price has reached its extreme which we may consider as yet another evidence favoring this short term bullish view. So based on all this, until the key support zone 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.
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