Hi Traders! EURGBP technical analysis and short term forecast 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.
On the daily chart, we had a strong support zone and the price which was moving lower has broken below this and held below it. After the breakout this strong support zone is acting as a strong resistance zone for us. Currently the price which is moving higher has reached this strong resistance zone and is bouncing lower from this zone. Until this strong resistance zone holds I expect short term bearish moves to happen here. In addition to this, the price has created a bearish hidden divergence between the first high that has formed at 0.87211 and the second high that has formed at 0.84924, based on the MACD indicator, which we may consider as evidence of bearish pressure. Also, currently there are no signs opposing this short term bearish view. So everything looks good here for the bears and we may now move down to lower timeframe and see if we can find evidences supporting this short term bearish view.
On the H4 chart, we could see that, we have a key resistance zone that has formed based on the 61.8%(0.84988) Fibonacci expansion level of the first wave of the correction. The price which was moving higher has reached this zone, respected it and is bouncing lower from this zone. In addition to this, we had a bearish divergence that has formed between the first high that has formed at 0.84702 and the second high that has formed at 0.84924 based on the MACD indicator, we may consider this as evidence of bearish pressure. Also, this bearish divergence supports the daily hidden bearish divergence which we may consider as another evidence of bearish pressure. In addition to this, currently there are no signs opposing this short term bearish view here as well. We may now move down to one more timeframe lower and see if we can find evidences supporting this short term bearish view.
Looking at the H1 chart, we could see that the price which was moving lower has created a bearish trend pattern in the form of three lower highs, lower lows we may consider this as evidence of bearish pressure. Generally, after a bearish trend pattern, we may expect corrections and then further continuation lower. Currently, it looks like the correction that we are looking for is happening. In addition to this, currently there are no signs opposing this short term bearish view here as well. So based on all this, until the strong resistance zone (marked in red) holds my short term view remains bearish here and I expect the price to move lower further.
EURGBP D1(Daily) Chart Analysis
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 sell setup then you can use any setup and strategy that you have in your arsenal to look for bearish moves and join this sell trade.
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Happy Trading!
Arvinth Akash
Traders Academy Club Team
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