Summary of analyses from week 34/2019
This week was not very kind to my analysis, one turned out to be completely contradictory to what the market had done, the other only predicted the continuation of the movement after the breakout from the rally formation.
So let’s start with the unsuccessful one. “AUDNZD -a breakout from rising wedge”. On Monday I wrote this: –
“On the H4 chart we can draw a line parallel to the resistance of the wedge from which the price broke on Friday, which can become a support for the growth channel. On the MACD there is a current downward divergence which suggests that if the support of the channel is defeated the downward trend will continue to the nearest demand zone starting at the level of 1.0480.”
I assumed a Short after a breakout from the channel… but this breakout turned out to be a trap, so we were dealing with a so-called false breakout and the price moved strongly up.
You have to ask yourself whether at the stage of writing the analysis it was possible to avoid erroneous conclusions. The only thing that comes to my mind is that the divergence on the basis of which I predicted the drops was already quite “old”, which means that the value of MACD was approaching zero, which should arouse suspicion in me that it can no longer be a confirmation of the declining attitude on this pair.
Second analysis written on Tuesday: “NZDUSD – bullish engulfing and false breakout” was neutral and I recommended to wait with the order until breakout from the formation. I wrote, among other things so:
-“In chart H4 below, we see that the price has been in consolidation for several days and a confirmed breakout in either direction may indicate a direction for the next few sessions.
Therefore, it is worth waiting for the daily candle to close and make than a decision when the price goes beyond the range of consolidation…”
And so it was more or less so – the price broke through the bottom and after the re-test of the defeated support went further south. Today, at the end of the day, an upward divergence appeared on H1 and H4, which may indicate a deeper correction on this pair.
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