Hi Traders! EURGBP forecast update and follow up is here. On May 27th I shared this “EURGBP Forecast And Technical Analysis” in this post lets 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!
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Now let’s summarize the idea first:
EURGBP H4(4 Hours) Chart Analysis – Bullish Trend Pattern, Key Support Zone, Parabolic Sar, ADX Indicator
On the H4 chart the price which was moving higher has created a bullish trend pattern that had completed itself, we may consider this as 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. We also had a strong resistance zone that had formed which the price has broken above and currently this strong resistance zone is acting as a strong support zone for us. While measuring the bullish trend pattern using the fibonacci retracement tool, we could see that the 38.2% fibonacci retracement level at 0.88738 and the 50% fibonacci retracement level at 0.88349 coincides exactly with the strong support zone which makes this area a key support zone for us. Also while looking at the Parabolic Sar we could see that the dots are below the price which we may consider as evidence of bullish pressure. In addition to this the ADX indicator gave a bullish signal 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 another evidence of bullish pressure. So until the key support zone (marked in green) holds my view remains bullish here.
EURGBP H4(4 Hours) Chart Current Scenario
Based on the above-mentioned analysis my view was bullish here and the price which is moving higher is currently nearing the previous high. My view still remains the same here until the price holds above the key support zone but currently we have potential bearish divergence that is forming on both H4 and H1 charts, this is something that we definitely need to pay attention to. So if you are involved in the buys then this is a very important place to consider and manage your trade (cash out or partial cash out or trailing protections or partial hedge, etc.. depending on the strategy that you work with).
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EURGBP H1(1 Hour) Chart
As traders we always have two choices, first one is to start and try to convince the market with many different variations like add positions or start to increase your lots, average down, etc… Or simply validate or invalidate your view, have alternative read, check again from the root of higher timeframe and make proper decisions according to the current market conditions. Always follow the facts, it doesn’t matter what view you had yesterday, what matters is what happens in the market today because the market is dynamic and it doesn’t necessarily have to agree with the way you see it. As long as the market follows my ideas and validates my setups I can trade and if it doesn’t switch, have a different read and turn around when required.
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To your success,
Vladimir Ribakov
Certified Financial Technician
