Hi Traders! GBPAUD short term forecast follow up and update is here. On April 20th I shared this “GBPAUD Technical Analysis And Short Term 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, we could see that the price which was moving higher has created a bearish divergence between the first high that has formed on 13th April 2022 and the second high that has formed on 18th April 2022 based on the MACD indicator,which we may consider as evidence of bearish pressure. Then the price which was moving lower has created a bearish trend pattern in the form of three lower highs, lower lows which we may consider as another evidence of bearish pressure. Generally, after a bearish trend pattern, we may expect corrections and then further continuation lower. Also, the ADX indicator gave a bearish signal here as well 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. Until the strong resistance zone (marked in blue) shown in the image below holds my short term view remains bearish here and I expect the price to continue lower further after pullbacks.
GBPAUD H1(1 Hour) Chart Current Scenario
Based on the above-mentioned analysis, on the H1 chart, my short term view was bearish here and I was expecting the price to move lower further until the strong resistance zone holds. The price action followed my analysis exactly as I expected it to here. After the bearish trend pattern the pullback that I was looking for happened and then the price moved lower further delivering 100+ pips move to downside before it was blocked by a bullish divergence.
On the M15 chart, the market provided us with fact supporting the bearish view. The price which was moving higher created a bearish hidden divergence between the first high that has formed at 1.76500 and the second high that has formed at 1.75926 based on the MACD indicator, which we may consider as evidence of bearish pressure. Also there we no signs opposing this bearish view. Then as you can see in the image below how the price moved lower further and provided a nice move to the downside!
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 to us and took the right action according to that.
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Happy Trading!
Arvinth Akash
Traders Academy Club Team
