Hi Traders! GBPCAD forecast update and follow up is here. On August 27th I shared this GBPCAD Technical Analysis And Forecast post in my 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 Traders Academy Club. Spoiler alert – free memberships are available!
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Now let’s summarize the idea first:
On the H4 chart, we could see that the correction happened in the form of double wave down and the price reached a strong support zone, respected it, and is currently moving higher. In addition to this, we also have a bullish divergence which we may consider as evidence of bullish pressure. We also have a good downtrend line that has formed, if we get a valid breakout above this downtrend line, we may then consider it as a validation for the bullish view and then we may expect the price to continue higher further.
GBPCAD H4(4 Hours) Chart Current Scenario
Based on the above-mentioned analysis my view was bullish here and I was looking for the price to validate the bullish view, which would be a valid breakout above the most recent downtrend line. This validation happened, as the price moved higher and broke above the most recent downtrend line and was holding above it, which we may consider as a fact provided by the market supporting the bullish view. The price then moved higher further as I expected it to and delivered around 180 pips move so far.
You can see this move clearly on the H1 chart below:
Currently, on the H4 chart, we have a potential bearish divergence that is forming at the moment, this is something that we need to pay attention to. As I always suggest when you see contradictory signs like this, then you should consider managing your trade and secure your profits (cash out or partial cash out or trailing protections or partial hedge, etc.. depending on the strategy that you work with).
Note: If you want to learn about Money Management you can find it here
So traders 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 GBPCAD forecast is a perfect example of this scenario.
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Happy Trading!
Yordan Kuzmanov
Chief Trader at the Traders Academy Club
