Hi Traders! GBPUSD technical analysis and short term forecast is here. We do our analysis on the MetaTrader4 platform (MT4), some very interesting, useful tips and hacks about the MT4 platform could be found here. As we do in every technical analysis post we are going to perform the multi-timeframe technical analysis on this pair in order to find possible trading opportunities. If you would like to learn more about the way we trade and the technical analysis we use then check out the Traders Academy Club Spoiler alert – free memberships are available! Let’s start our analysis from the highest timeframe which will be the daily chart here.
GBPUSD D1(Daily) Chart Analysis – Bearish Hidden Divergence, Stochastic Oscillator
On the daily chart, after the strong bearish rally currently it looks like a pullback is happening and the price which is moving higher has created a bearish hidden divergence that has formed between the first high that has formed on 23rd March 2022 and the second current high that has formed on 26th May 2022 based on the MACD indicator which we may consider as 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. In addition to this, currently there are no signs opposing this short term bearish view. We may now move down to lower timeframe and see if we can find evidences supporting this short term bearish view.
GBPUSD H4(4 Hours) Chart Analysis – Key Resistance Zone, Bearish Divergence, Stochastic Oscillator
On the H4 chart, the price which is moving higher has currently reached a key resistance zone that has formed based on the 61.8%(1.25421) and 100%(1.26734) Fibonacci expansion levels of the first wave. Also, we have a bearish divergence that has formed between the first high that has formed at 1.25009 and the second high that has formed at 1.26206 based on the MACD indicator which we may consider as evidence of bearish pressure. In addition to this, based on the Stochastic Oscillator we could see that the price has reached its extreme here as well which we may consider as yet another evidence of bearish pressure. So everything looks good here for the bears. If we get a valid breakout below the low at 1.24747 we may then consider it as a validation for this short term bearish view and may expect the price to move lower further.
Technical Analysis & Forecast Summary
GBPUSD D1(Daily) Chart Analysis
- Bearish Hidden Divergence, Stochastic Oscillator
GBPUSD H4(4 Hours) Chart Analysis
- Key Resistance Zone, Bearish Divergence, Stochastic Oscillator
Trading Tips
It is always recommended to look for confirmations before you jump into any trade. If you are not sure about how to trade this short term sell setup then you can use any setup and strategy that you have in your arsenal to look for bearish moves and join this sell trade.
Also, don’t forget to protect your sell trade using a stop loss and make sure to set a target and keep a proper risk/reward ratio.
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Happy Trading!
Arvinth Akash
Traders Academy Club Team
