Hi Traders! EURGBP short term forecast update and follow up is here. On October 18th 2023 I shared this “EURGBP Technical Analysis And Short Term 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 Home Trader 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 here as well 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 here as well 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(marked in green) holds my short term view remains bullish here and I expect the price to move higher further after pullbacks.
Based on the above-mentioned analysis my short-term view was bullish here and I was expecting the price to move higher further until the two strong support zones hold. The price action followed my analysis here exactly as I expected it to. After the bullish trend pattern, the price which was moving lower reached the first strong support zone, respected it and then it bounced higher from this zone. The price then moved higher further and delivered an excellent move to the upside so far!
On the M15 chart, the market provided us with various facts supporting the bullish view. The price which was moving lower created a bullish divergence between the first low which formed at 0.86711 and the second low that has formed at 0.86601 based on the MACD indicator. The price then moved higher and broke above the most recent downtrend line, we may consider these as facts provided by the market supporting the bullish view. Then as you can see in the image below how the price moved higher after that and provided a nice move to the upside.
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 to us and took the right action according to that.
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Happy Trading!
Arvinth Akash
Home Trader Club Team.
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