Hi Traders! GBPAUD forecast follow up and update is here. On April 8th I shared this “GBPAUD Technical Analysis And Forecast” 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:
On the H1 chart, the price which is moving lower has created a bearish trend pattern in the form of three lower highs, lower lows which we may consider as evidence of bearish pressure. Generally, after a bearish trend pattern, we may expect corrections and then further continuation lower. 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 value over 25 which we may consider as yet another evidence of bearish pressure. Also, we have a strong support zone that has formed and the price which is moving lower has broken below this zone and is holding below it, we may consider this as another evidence of bearish pressure. Currently, this strong support zone is acting as a strong resistance zone for us. Until this strong resistance zone holds my view here is bearish and I expect the price to move lower further after pullbacks.
GBPAUD H1(1 Hour) Chart Current Scenario
On the H1 chart, my view was bearish and I was expecting the price to move lower further until the strong resistance zone holds. After the bearish trend pattern, we had a pullback, and most importantly the price was holding below the strong resistance zone. In addition to this the price created a bearish divergence between the first high that has formed at 1.80263 and the second high that has formed at 1.80866 based on the MACD indicator. Then the price moved lower and broke below the most recent uptrend line. We may consider these as facts provided by the market supporting the bearish view, and also there were no signs opposing this bearish view. The price then moved lower further as I expected it to and delivered around 320+ pips move so far.
(Note: You can learn about a Killer Forex Strategy “Double Trend Line Principle” here)
Currently, on the H1 chart, we have a bullish divergence in play this is something that we need to pay attention to. So if you are still involved in the sells then this is a good place to consider managing your trade and secure your profits (cash out or partial cash out or trailing protections or partial hedge, etc.. depending on the strategy that you work with).
Note: If you want to learn about Money Management you can find it here
As traders we always have two choices, the first one is to fall in love with our analysis and try to convince the market and expect the price to move in the direction as per our wish. The second one is to follow the facts that the market provides us and make the right actions according to that. As you know the first option won’t help us and as you can see in the example above what happened when we followed the facts that the market hinted us and took the right action according to that.
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Happy Trading!
Yordan Kuzmanov
Chief Trader at the Traders Academy Club
