Hi Traders! EURGBP technical analysis and short term forecast post 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. 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!
On the H4 chart, the price which was moving lower reached a key support zone. This key support zone is formed by the 100%(0.87530) Fibonacci expansion level of the big wave, the 61.8%(0.87461) Fibonacci expansion level of the small wave. The price respected this zone and bounced higher from this zone. Also, we could see that the price which was moving lower created a bullish divergence that has formed between the first low that has formed at 0.87832 and the second low that has formed at 0.87546 based on the MACD indicator. The price then moved higher and broke above the last high at 0.88352 creating higher highs, thus forming a classical setup of bullish divergence followed by bullish convergence. Hence as per the book scenario, after a bullish convergence, we may look for corrections to happen and then further continuation to the upside. Currently, it looks like a correction is happening. In addition to this, the ADX indicator gave a bullish signal here at the cross of +DI (green line) versus -DI (red line) and the main signal line (silver line) reads value over 25, we may consider this as yet another evidence of bullish pressure. Also, currently, there are no signs opposing this bullish view. So based on all this, until the key support zone holds my short-term view remains bullish here and I expect the price to move higher further.
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 buy setup then you can use any setup and strategy that you have in your arsenal to look for bullish moves and join this buy trade.
Also, don’t forget to protect your buy 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
Home Trader Club Team
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