Hi Traders! GBPJPY short term forecast follow up and update is here. On October 20th I shared this “GBPJPY 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 that has formed between the first high that has formed at 157.412 and the second high that has formed at 158.212 based on the MACD indicator which we may consider as evidence of bearish pressure. Also, we can see this bearish divergence on the RSI indicator as well followed by the most recent uptrend line breakout, which we may consider as other evidences of bearish pressure. In addition to this, looking at the Bollinger Bands we could see that we have 20+ candles ride on the upper Bollinger Band which we may consider as yet another evidence of bearish pressure. So, based on all this my short term view remains bearish here and I expect the price to move lower further.
GBPJPY H4(4 Hours) Chart Current Scenario
In this pair, based on the above-mentioned analysis my short term view was bearish and I was expecting the price to move lower further. On the H4 chart, the short term bearish move happened exactly as I expected it to. After the bearish divergence and 20+ candles ride on the upper band of the Bollinger Bands, the price action followed my analysis and moved lower as per the plan and delivered 220+ pips move.
On the M15 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 157.994 and the second high that has formed at 158.193 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 fantastic move to the downside.
(Note: You can learn about a Killer Forex Strategy “Double Trend Line Principle” 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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To your success,
Vladimir Ribakov
Certified Financial Technician
