Hi Traders! GBPAUD technical analysis and short term forecast post is here. The way I would like to analyze the chart for setups is based on multi-timeframe confirmations because in my POV if we get more evidences on different timeframes for the same direction then it makes the setup much more reliable. 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! Let’s start our analysis from the highest timeframe which will be the daily chart here.
GBPAUD D1(Daily) Chart Analysis – Key Resistance Zone, Bearish Divergence, ADX Indicator
On the daily chart, the price reached a key resistance zone that has formed based on the 61.8%(1.86800) Fibonacci expansion level of the first wave. The price respected this zone and is currently bouncing lower from it. Also, we have multiple bearish divergences that has formed between the first high formed at 1.81982 and the second high formed at 1.87002 based on the MACD indicator which we may consider as evidence of bearish pressure. In addition to this, the ADX indicator gave a bearish signal here at the cross of -DI (red line) versus +DI (green line) and the main signal line (silver line) reads a value over 25 which we may consider as another evidence of bearish pressure. So everything looks good here for the bears and we may now move down to lower timeframe and look for evidence supporting this short-term bearish view.
GBPAUD H1(1 Hour) Chart Analysis – Bearish Trend Pattern, Two Strong Resistance Zones
On the H1 chart, the price which is moving lower has created a bearish trend pattern in the form of three lower highs, and lower lows which we may consider as evidence of bearish pressure. Generally, after a bearish trend pattern, we may expect corrections and then a further continuation lower. Currently, it looks like a correction is happening. Also, we had two strong support zones that have formed, the price moved lower broke below these zones and is holding below them, we may consider this as yet another evidence of bearish pressure. Currently, these strong support zones are acting as strong resistance zones for us. So the bottom line here is that the H1 chart has evidences supporting the bearish view. Until the two strong resistance zones (marked in red) shown in the image below hold my short-term view remains bearish here and I expect the price to move lower further.
Technical Analysis & Forecast Summary
GBPAUD D1(Daily) Chart Analysis
- Key Resistance Zone, Bearish Divergence, ADX Indicator
GBPAUD H1(1 Hour) Chart Analysis
- Bearish Trend Pattern, Two Strong Resistance Zones
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 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.
Also, don’t forget to protect your sell trade using a stop loss and make sure to set a target and keep a proper risk/reward ratio.
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Arvinth Akash
Home Trader Club Team.
