The Art of Technical Analysis in Forex Trading

The Art of Technical Analysis in Forex Trading

When looking at the NZDUSD pair, it is evident that it has faced resistance around the 0.6220 level. Despite attempts to break through, the pair settled at 0.6170. The Relative Strength Index (RSI) showed a slight drop in buying pressure, while the Moving Average Convergence Divergence (MACD) displayed flat red bars, indicating a consolidation pattern. This resistance and consolidation phase followed a brief rise in the NZDUSD pair.

Analyzing the NZDUSD on the 3-hour timeframe chart revealed a break above two previous highs, creating a strong demand zone. The presence of the 200-period moving average added to the bullish sentiment. With trendline support and Fibonacci retracement levels pointing towards a bullish reaction, analysts anticipate a bullish direction with a target of 0.61993 and an invalidation point at 0.60937.

Spotting a trade idea on the 4-hour timeframe chart of the NZDCHF pair, it was observed that the previous high was cleared of liquidity before a structural break occurred. The expectation is a bearish move following a retracement into the supply zone aligned with the 88% Fibonacci retracement level. Analysts predict a bearish direction with a target of 0.54846 and an invalidation point at 0.56183.

On the 2-hour timeframe chart of the NZDJPY pair, a breakout led to the price slowly moving downwards in search of a demand area to attract new buyers. The highlighted demand zone coincided with the 88% Fibonacci retracement level and trendline support, supporting a bullish sentiment. Analysts expect a bullish direction with a target of 96.879 and an invalidation point at 95.483.

Trading CFDs involves risks, and managing these risks is crucial for success. Traders should conduct thorough research and manage their risk appropriately to avoid costly mistakes. It is essential to understand technical analysis techniques and market trends to make informed trading decisions. By implementing proper risk management strategies, traders can enhance their chances of success in the forex market.

Technical Analysis

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