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! In this pair we are going to perform the top – down analysis in order to find possible trading opportunities. Let’s start our analysis now from the highest timeframe which will be the H4 chart here.
EURGBP H4(4 Hours) Chart Analysis – Bearish Divergence, Lower Lows, Bearish Hidden Divergence, Stochastic Oscillator
On the H4 chart, we have a bearish divergence that has formed, between the first high formed at 0.88638 and the second high formed at 0.88748 based on the MACD indicator which we may consider as evidence of bearish pressure. The price then moved lower and broke below the last low at 0.87911 thus creating lower lows which we may consider as another evidence of bearish pressure. In addition to this, we could see that the price has created a bearish hidden divergence between the first high that has formed at 0.88748 and the second current high that has formed at 0.88289 based on the MACD indicator, which we may consider as evidence of bearish pressure. Also, based on the Stochastic Oscillator we could see that the price has reached its extreme which we may consider as yet another evidence of bearish pressure. So everything looks good here for the bears and we may now move down to a lower timeframe and look for evidence supporting this short-term bearish view.
EURGBP H1(1 Hour) Chart Analysis – Bearish Trend Pattern, ADX Indicator, Two Strong Resistance Zones
On the H1 chart, the price which is moving lower has created a bearish trend pattern in the form of three lower highs, and lower lows which we may consider as evidence of bearish pressure. Generally, after a bearish trend pattern, we may expect corrections and then a further continuation lower. Currently, it looks like a correction is happening. In addition to this, the ADX indicator gave a bearish signal here at the cross of -DI (red line) versus +DI (green line) and the main signal line (silver line) reads a value over 25 which we may consider as yet another evidence of bearish pressure. Also, we had two strong support zones that have formed and the price which was moving lower has broken below these zones and is holding below them, we may consider this as yet another evidence of bearish pressure. Currently, these strong support zones are acting as strong resistance zones for us. Until these two strong resistance zones (marked in red) shown in the image below hold, my short-term view remains bearish here and I expect the price to move lower further.
Technical Analysis & Forecast Summary
EURGBP H4(4 Hours) Chart Analysis
- Bearish Divergence, Lower Lows, Bearish Hidden Divergence, Stochastic Oscillator
EURGBP H1(1 Hour) Chart Analysis
- Bearish Trend Pattern, ADX Indicator, Two Strong Resistance Zones
Trading Tips
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 sell setup then you can use any setup and strategy that you have in your arsenal to look for bearish moves and join this sell trade.
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Arvinth Akash
Home Trader Club Team.
