Hi Traders! Arvinth here from Traders Academy Club team. Weekly summary and review May 20th, 2022 is here. It is now time to recap and summarize the trade setups that we had during this week. Below you will find the short explanation of all the trade setups we had this week and how it has currently developed now.

Trading Ideas (Blog Posts)

NZDCHF – My idea here was “On the H1 chart, based on the Heikin Ashi candles we can see that currently, we have strong bullish bodies in upward moving market conditions so it basically reflects a bullish environment. Also, 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 another 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 could see that the price which is moving higher has created higher highs based on the MACD indicator, which is a sign of gaining momentum towards the bullish side. 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. 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 hold my short term view remains bullish here and I expect the price to move higher further”.

Current Scenario – In this pair my view was bullish and I was expecting the price to move higher further until the two strong support zones hold. After the bullish trend pattern the pullback that I was looking for happened with the price reaching the first strong support zone, respected it and bounced higher from this zone. The price moved higher and delivered around 60 pips move before it moved lower and broke below the first strong support zone. The price then moved lower reached the second strong support zone and then it bounced higher and delivered around 50 pips move before it moved lower and broke below it. My current view on this pair is neutral.

USDCHF – My idea here was “On the H1 chart, the price which was moving higher has created a bearish divergence between the first high that has formed at 1.00490 and the second high that has formed at 1.00641 based on the MACD indicator. The price then moved lower and broke below the last low at 0.99921 thus forming a classical setup of bearish divergence followed by bearish convergence, we may consider these as evidences of bearish pressure. Generally, after a bearish convergence we may look for corrections and then further continuation lower. Currently, it looks like a correction is happening and in addition to this, the price has created a bearish hidden divergence that has formed between the first high that has formed at 1.00641 and the second high that has formed at 0.99844 based on the MACD indicator which we may consider as another evidence of bearish pressure. Also, based on the Stochastic Oscillator we could see that the price has reached its extreme which we may consider as yet another evidence of bearish pressure. Until the strong resistance zone (marked in red) holds my short term view remains bearish here and I expect the price to move lower further”.

Current Scenario – Based on the above-mentioned analysis my short term view was bearish here and I was expecting the price to move lower further until the strong resistance zone holds. The price action followed my analysis exactly as I expected it to here. After the bearish convergence we had a pullback and then the price moved lower further delivering 280+ pips move so far.

EURCAD – My idea here was “Looking at the H1 chart, we could see that the price which was moving lower has reached a strong support zone, respected it and bounced higher from this zone. Also, we should note that the price which was in a bearish trend so far creating series of lower highs, lower lows has created higher highs for the first time in a while which we may consider as sign of a possible trend change. In addition to this, the price which was moving lower created a bullish divergence that has formed between the first low that has formed at 1.34177 and the second low that has formed at 1.33896 based on the MACD indicator. The price then moved higher and broke above the last high at 1.35010 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, the price which is currently moving lower has created a bullish hidden divergence that has formed between the first low that has formed at 1.33896 and the second low that has formed at 1.34497 based on the MACD indicator we may consider these as evidences of bullish pressure. So based on all this, until the strong support zone (marked in blue) holds my short expectation is bullish here and I expect the price to move higher further. A valid breakout above the most recent downtrend line would be the validation for this bullish view”.

Current Scenario – In EURCAD the validation for the short term bullish view which is a valid breakout above the most recent downtrend line happened here as per the plan. We then had a pullback and then the price moved higher further as I expected it to and delivered 130+ pips move to the upside!
You can see this move clearly on the M15 chart below.
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