EURGBP Forecast Follow Up And Update

Hi Traders! EURGBP forecast follow up and update is here. On March 31st I shared this “EURGBP Technical Analysis and Forecast” 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 H1 chart, based on the Heikin Ashi candles we can see that currently, we have strong bullish bodies in upward moving market conditions so it basically reflects a bullish environment. Also, the price which is moving higher has created a bullish trend pattern in the form of three higher highs, higher lows, we may consider this as another evidence of bullish pressure. Generally, after a bullish trend pattern, we may expect corrections and then potential continuation higher. Currently, it looks like a correction is happening, also we had two strong resistance zones that has formed and the price which was moving higher has broken above these zones and is holding above them. After the breakout these strong resistance zones are acting as two strong support zones for us. Until both these strong support zones shown in the image below holds my view remains bullish here and I expect the price to move higher further.

EURGBP H1(1 Hour) Chart Current Scenario

Based on the above-mentioned analysis my view was bullish here until the two strong support zones hold and I was expecting the price to move higher further. In addition to this, I also mentioned that “if we get a valid breakout below the daily uptrend line then it would invalidate this bullish view”. The price action didn’t follow my analysis here and this idea failed. The price which was moving lower reached the second strong support zone but the price didn’t hold in this zone as I expected it to. The price then moved lower further and we got a valid breakout below the second strong support zone. In addition to this, the price moved lower further and has also broken below the daily uptrend line and is holding below it, thus invalidating the bullish view here. My current view on this pair is neutral.
So traders, this is why I wanted to show this example to help you understand why we should always trade based on the facts and hints provided by the market and take the right actions according to that. Even though we had various facts supporting the bullish view here, the price didn’t hold in the two support zones as I expected it to and broke below them. Also, in addition to this, the price broke below the daily uptrend line as well, we may consider these as contradictory signs provided by the market opposing the bullish view. Also, you should keep in mind that losses are part of trading we can’t expect every trade to go as per our plan and provide us profits. In trading, we can’t avoid losses but in order to be successful in trading, we should know how to cut losses early and how to manage the trade when the price goes in the opposite direction.

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Arvinth Akash
Traders Academy Club Team