Hi Traders! EURGBP short term forecast and technical analysis post is here. In this pair, based on the multi-timeframe analysis method, we are going to look for the evidences on three timeframes that is on the current trading timeframe and two timeframes higher, when we get evidences that support our view on these three timeframes this makes the setup very reliable. 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 Traders Academy Club Spoiler alert – free memberships are available! Let’s start our analysis now from the highest timeframe which will be the daily chart here.
- 1 EURGBP D1(Daily) Chart Analysis – Bullish Divergence, Higher Highs, Strong Support Zone, Stochastic Oscillator
- 2 EURGBP H4(4 Hours) Chart Analysis – Key Support Zone, Bullish Divergence, ADX Indicator
- 3 EURGBP H1(1 Hour) Chart Analysis – Bullish Convergence, ADX Indicator, Strong Support Zone
- 4 Technical Analysis & Forecast Summary
- 5 Trading Tips
EURGBP D1(Daily) Chart Analysis – Bullish Divergence, Higher Highs, Strong Support Zone, Stochastic Oscillator
On the daily chart, the price which was moving lower created a bullish divergence that has formed between the first low that has formed at 0.83051 and the second low that has formed at 0.82848 based on the MACD indicator which we may consider as evidence of bullish pressure. The price then moved higher and has created higher highs between the first high that has formed at 0.84225 and the second high that has formed at 0.84779 based on the MACD indicator which we may consider as another evidence of bullish pressure. The price then moved lower, reached a strong support, respected it and is bouncing higher from this zone. Also, based on the Stochastic Oscillator we could see that the price has reached its extreme, we may consider this as yet another evidence of bullish pressure. We may now move down to lower timeframe and see if we can find evidences supporting this short term bullish view.
EURGBP H4(4 Hours) Chart Analysis – Key Support Zone, Bullish Divergence, ADX Indicator
Looking at the H4 chart, we could see that the price which is moving lower has reached a key support zone formed by the 61.8% (0.83217) Fibonacci expansion level of the first wave. The price respected this zone and is currently bouncing higher from this zone. Also, the price which was moving lower created a bullish divergence that has formed between the first low that has formed at 0.83463 and the second low that has formed at 0.83109 based on the MACD indicator which we may consider as evidence of bullish pressure. 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 another evidence of bullish pressure. So the bottom line here is that the H4 chart has evidences supporting the bullish view. We may now move down to one more timeframe lower and see if we can find evidences supporting this bullish view.
EURGBP H1(1 Hour) Chart Analysis – Bullish Convergence, ADX Indicator, Strong Support Zone
On the H1 chart, we had a bullish divergence that has formed between the first low that has formed at 0.83339 and the second low that has formed at 0.83109 based on the MACD indicator. Then the price moved higher and broke above the last high at 0.83562 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 as well 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. Until the strong support zone (marked in blue) shown in the image below holds my short term view remains bullish here and I expect the price to move higher further after pullbacks.
Technical Analysis & Forecast Summary
EURGBP D1(Daily) Chart Analysis
- Bullish Divergence, Higher Highs, Strong Support Zone, Stochastic Oscillator
EURGBP H4(4 Hours) Chart Analysis
- Key Support Zone, Bullish Divergence, ADX Indicator
EURGBP H1(1 Hour) Chart Analysis
- Bullish Convergence, ADX Indicator, Strong Support Zone
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 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
Traders Academy Club Team
