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Hi Traders! EURNZD technical analysis and forecast post is here. As I do with every technical analysis post, multi-time frame analysis method will be applied in order to look for all the possible evidences that support my view on the current trading timeframe and the higher timeframe. The platform in which we perform this multi-timeframe analysis is on the MetaTrader4(MT4). You can find some useful tips and hacks about the MT4 platform here. We will start our analysis from the highest timeframe now which will be the daily chart here.
EURNZD D1(Daily) Chart Analysis – Strong Support Zone, Bullish Divergence, ADX Indicator
On the daily chart, the price which is moving lower has created three waves to the downside. While measuring the first two waves using the fibonacci expansion tool we have a strong support zone that has formed based on the 61.8% fibonacci expansion level of the first wave at 1.68367 and the 61.8% fibonacci expansion level of the second wave at 1.69951. In addition to this, the 1.71 psychological level also coincides on the same zone which makes this area a key support zone for us. The price which was moving lower reached this support zone, respected it, and is currently moving higher. We also have a bullish divergence that has formed between the first low that has formed on 8th June 2020 and the second low that has formed on 9th July 2020 based on the MACD indicator which we may consider as evidence of bullish pressure. Also, the ADX indicator gave a bullish signal 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. Currently, while measuring the first wave of the up move using the fibonacci expansion tool we could see that the price has broken and holding above the 161.8% (1.78017) fibonacci expansion level and it still has room higher towards the 261.8% (1.81340) fibonacci expansion level. We may now move down to lower timeframe and see if we can find evidences supporting this bullish view.
EURNZD H4(4 Hours) Chart Analysis – Bullish Trend Pattern, Triangle Breakout, Heiken Ashi Candles
On the H4 chart, the price which is moving higher has created two waves to the upside. After the two waves, we had a correction in the form of a triangle pattern. Then the price broke above this triangle pattern and created a new high thus forming a bullish trend pattern, which we may consider as evidence of bullish pressure. So based on all this my view is bullish here and I expect the price to continue higher further.
Also, 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. So until the condition changes my view remains bullish here.
EURNZD D1(Daily) Chart Analysis
- Strong Support Zone, Bullish Divergence, ADX Indicator
EURNZD H4(4 Hours) Chart Analysis
- Bullish Trend Pattern, Triangle Breakout, Heiken Ashi Candles
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.
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To your success,
Certified Financial Technician
Optimum Price Action(OPA)