Hi Traders! GBPAUD forecast update and follow up is here. On June 2nd I shared this “GBPAUD Short Term Forecast And Technical Analysis” post in my 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 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 evidence of bearish pressure. Currently, this strong support zone is acting as a strong resistance zone for us. We also have a bearish hidden divergence that has formed between the first high that has formed at 1.83888 and the second high that has formed at 1.83215 based on the MACD indicator which we may consider as another evidence of bearish pressure. Also we have a downtrend line that has formed and the price is holding below it, until this dynamic resistance holds my view remains bearish here and I expect the price to move lower further in the short term. If we get a valid breakout above this downtrend line then this short term bearish view will be invalidated.
GBPAUD H1(1 Hour) Chart Current Scenario
In this pair my view was bearish and I was expecting the price to move lower further until the downtrend line holds. The price action didn’t follow my analysis here and this idea failed as the price moved higher and broke above the strong resistance zone and also we got a valid breakout above the downtrend line as well. I see these as contradictory signs opposing the bearish view. Thus the bearish view has got invalidated here, my current view on this pair is neutral.
So traders, this is why I wanted to show this example to help you understand why we should always trade based on the facts and hints provided by the market and take the right actions according to that. Even though we had a bearish hidden divergence in play on the H1 chart, the price didn’t hold below the strong resistance zone and the downtrend line which I see as contradictory signs. You should always keep in mind that losses are part of trading we can’t expect every trade to go as per our plan and provide us profits. In trading, we can’t avoid losses but in order to be successful in trading, we should know how to cut losses early and how to manage the trade when the price goes in the opposite direction. When you see contradictory signs like this opposing our view then it is always recommended to cut your losses early and get out of the trade.
Note: You can watch my webinar on how to cut losses early here
In order to learn about this and much more, I invite you to join the Traders Academy Club and you can also get access to our complete watch list and trade report.
This is how the report looks like. A table with the hottest market opportunities, screenshot behind every pair and time frame (anything that is in blue inside the table is clickable and leads to a screenshot) + a summary in text format, kind of highlights. And of course, Live Market Analysis every single day.
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Happy Trading!
Yordan Kuzmanov
Chief Trader at the Traders Academy Club
