Hi Traders! GBPCHF short term forecast update and follow up is here. On September 28th I shared this “GBPCHF Short Term Forecast And Technical Analysis” 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 Traders Academy Club. Spoiler alert – free memberships are available!
My Idea
On the H4 chart, the price which was moving higher has created a bearish divergence between the first high that has formed at 1.27964 and the second high that has formed at 1.28184 based on the MACD indicator. The price then moved lower and broke below the last low at 1.26595 thus forming a classical setup of bearish divergence followed by bearish convergence, we may consider these as evidences of bearish pressure. Generally, after a bearish convergence we may look for corrections and then further continuation lower. Currently, it looks like a correction is happening and in addition to this, the price has created a bearish hidden divergence that has formed between the first high that has formed at 1.28184 and the second high that has formed at 1.27063 based on the MACD indicator which we may consider as yet another evidence of bearish pressure. Until the two strong resistance zones hold my short term view remains bearish here and I expect the price to move lower further.
GBPCHF H4(4 Hours) Chart Current Scenario
Based on the above-mentioned analysis my view was bearish here and I was expecting the price to move lower further until the strong resistance zones hold. The price action followed my analysis exactly as I expected it to here. The price which was moving higher reached the first strong resistance zone, respected it and moved lower from this zone. The price then moved lower further as I expected it to and delivered 130+ pips move so far.
On the H1 chart, the market provided us with various facts supporting the bearish view. The price which was moving higher created a bearish divergence between the first high that has formed at 1.27062 and the second high that has formed at 1.27306 based on the MACD indicator. The price then moved lower and broke below the most recent uptrend line. We may consider these as facts provided by the market supporting the bearish view and also there we no signs opposing this bearish view. Then as you can see in the image below how the price moved lower further and provided a nice move to the downside.
(Note: You can learn about a Killer Forex Strategy “Double Trend Line Principle” here)
Currently, on the H4 chart, we have a potential bullish divergence that is forming at the moment, this is something that we need to pay attention to. So if you are still involved in the sells then this is a good place to 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
As traders we always have two choices, the first one is to fall in love with our analysis and try to convince the market and expect the price to move in the direction as per our wish. The second one is to follow the facts that the market provides us and make the right actions according to that. As you know the first option won’t help us and as you can see in the example above what happened when we followed the facts that the market hinted us and took the right action according to that.
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If you have any further questions, don’t hesitate to drop a comment below!
Happy Trading!
Arvinth Akash
Traders Academy Club Team
