Hi Traders! EURGBP short term forecast update and follow up is here. On February 22nd 2022 I shared this “EURGBP Short Term Forecast And Technical Analysis” 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
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. 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.
EURGBP H4(4 Hours) Chart Current Scenario
On the H4 chart, 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 strong support zone holds. The price action followed my analysis exactly as I expected it to here. The price which was moving lower reached the strong support zone and respected it. Also, the price which was moving lower created a bullish divergence that has formed between the first low that has formed at 0.83109 and the second low that has formed at 0.83059 based on the MACD indicator which we may consider as a fact provided by the market supporting this bullish view. The price then moved higher further and delivered around 100 pips move!
On the H1 chart, the market provided us with fact supporting the bullish view. The H4 chart, pullback happened in the form of double wave down, then the price 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.
(Note: You can learn about a Killer Forex Strategy “Double Trend Line Principle” here)
So, traders, this is why I wanted to show this example to help you understand how important it is to follow the facts. The facts were supporting the bullish view here and there were no signs against it. When the facts do happen as we expected you can see how the price perfectly moved as per the plan. Because these are the kind of hints the market provides us at majority of the times and it’s our obligation as traders to be able to listen to these things that the market tells us and we should try to make the right actions.
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Happy Trading!
Arvinth Akash
Traders Academy Club Team.
