Hi Traders! GBPAUD short term forecast update and follow up is here. On May 15th, 2024 I shared this “GBPAUD Technical Analysis And Short Term Forecast” post in our blog. In this post, let’s do a recap of this setup and see how it has developed now. If you would like to learn more about the way we trade and the technical analysis we use then check out the Home Trader Club. Spoiler alert – free memberships are available!
My Idea
On the H1 chart, the price which is moving lower has created a bearish trend pattern in the form of three lower highs, lower lows which we may consider as evidence of bearish pressure. Generally, after a bearish trend pattern, we may expect corrections and then further continuation lower. Currently it looks like a flat correction is happening in the form of a range. This range is formed by the highs and lows reaching parallel support and resistance zones. A valid breakout below the bottom of the range would be the validation for this bearish view. Alternatively if we get a valid breakout above the top of this range then this bearish view will be invalidated.
GBPAUD H1(1 Hour) Chart Current Scenario
In this pair based on the above-mentioned analysis my short term view was bearish. Also, I mentioned that “A valid breakout below the bottom of the range would be the validation for this bearish view. Alternatively if we get a valid breakout above the top of this range then this bearish view will be invalidated.”. The validation for the bearish view which is a valid breakout below the bottom of the range didn’t happen here. Alternatively, the price moved higher and we got a valid breakout above the top of the range, thus invalidating this bearish view.
So, traders, this is why I wanted to show this example to help you understand why we should always trade based on the facts and hints provided by the market and take the right actions according to that. Even though we had facts supporting the bearish view here, the price moved higher, and we got a valid breakout above the top of the range which we may consider as a fact provided by the market invalidating this bearish view.
When it comes to trading, there are various important factors that we need to pay attention to, just because we have a good setup doesn’t mean that we can enter the trade randomly and it will pay us huge profits. First of all, we need to validate the entry and we should have a perfect entry plan to get into the trade which is a key factor when it comes to trading. This GBPAUD short-term forecast is yet another good example of this scenario.
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Arvinth Akash
Home Trader Club Team.
