Hi Traders! GBPAUD forecast follow up and update is here. On January 14th I shared this “GBPAUD Technical Analysis And Forecast” 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, 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 evidence of bullish pressure. Generally, after a bullish trend pattern, we may expect corrections and then potential continuation higher. Currently, it looks like a correction is happening. We also have a bullish divergence between the first low that has formed at 1.75935 and the second low that has formed at 1.75584 based on the MACD indicator. Also based on the Stochastic Oscillator we could see that the price has reached its extreme. We may consider these as evidences of bullish pressure and currently, there are no signs opposing this bullish view. In addition to this, we had a strong resistance zone that had formed and the price which is moving higher has broken above this strong resistance zone and is holding above it. Currently, this strong resistance zone is acting as a strong support zone for us. Until this strong support zone holds my view remains bullish here and I expect the price to move higher further.
Based on the above-mentioned analysis my view was bullish here and I was expecting the price to move higher further until the strong support zone holds. On the H1 chart, the price moved lower reached the strong support zone, respected it, and bounced higher from this zone. We also had a bullish divergence that had formed between the first low that has formed at 1.75932 and the second low that has formed at 1.75488 based on the MACD indicator. Then the price moved higher and broke above the most recent downtrend line, we may consider these as facts provided by the market supporting the bullish view. The price then moved higher further providing 320+ pips move so far.
(Note: You can learn about a Killer Forex Strategy “Double Trend Line Principle” here)
So, traders, this is why I wanted to show this example to help you understand how important it is to follow the facts. The facts were supporting the bullish view here and there were no signs against it. When the facts do happen as we expected you can see how the price perfectly moved as per the plan. Because these are the kind of hints the market provides us at majority of the times and it’s our obligation as traders to be able to listen to these things that the market tells us and we should try to make the right actions.
(Note: You can follow us here on Trading View and also on our blog to get similar ideas on a daily basis)
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Happy Trading!
Yordan Kuzmanov
Chief Trader at the Traders Academy Club
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