Hi Traders! EURGBP technical analysis and short term forecast post is here. 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 Home Trader Club Spoiler alert – free memberships are available! In this pair we are going to perform the top – down analysis in order to find possible trading opportunities. Let’s start our analysis now from the highest timeframe which will be the H4 chart here.
On the H4 chart, we have a bullish rally and currently, it looks like this bullish rally is about to continue. 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, we could see that the price which was moving higher has created higher highs based on the MACD indicator, which is a sign of gaining momentum towards the bullish side. Also, based on the Parabolic Sar we could see that the dots are below the price which we may consider as another 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 based on all this, my short-term view is bullish here and we may now move down to lower timeframe and look for evidences supporting this bullish view.
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. 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 yet another evidence of bullish pressure. 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.
EURGBP H4(4 Hours) Chart Analysis
EURGBP H1(1 Hour) Chart Analysis
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
Home Trader Club Team
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