Hi Traders! GBPAUD short term forecast update and follow up is here. On September 9th I shared this “GBPAUD Short Term Forecast And Technical Analysis” 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 H4 chart, we had two strong support zones that has formed and the price which is moving lower has broken below these zones and is holding below them, we may consider this as evidence of bearish pressure. Currently, these strong support zones are acting as strong resistance zones for us and the price which is moving higher has reached the first strong resistance zone. We also have a potential bearish hidden divergence that has formed between the first high that has formed at 1.91519 and the second current high at 1.87473 based on the MACD indicator. In addition to this, based on the Stochastic Oscillator we could see that the price has reached its extreme. We may consider these as other evidences of bearish pressure and also there are no signs opposing this bearish view. So based on all this, my short term view here is bearish and I expect the price to move lower further until the two strong resistance zones hold.
GBPAUD H4(4 Hours) Chart Current Scenario
Based on the above-mentioned analysis my view was bearish here and I was expecting the price to move lower further until the strong resistance zones hold. The price action followed my analysis exactly as I expected it to here. The price which was moving higher reached the second strong resistance zone, respected it and moved lower from this zone. We also had a bearish divergence that had formed between the first high that has formed at 1.89175 and the second high that has formed at 1.89597 based on the MACD indicator which we may consider as a fact provided by the market supporting the bearish view. The price then moved lower further as I expected it to and delivered around 170 pips move so far.
On the H1 and M15 charts, the market provided us with various facts supporting the bearish view. On the H1 chart, the price which was moving higher created multiple false breaks with a bearish divergence between the first high that has formed at 1.89175 and the second high that has formed at 1.89597 based on the MACD indicator.
Also, we had a breakout of the most recent uptrend line on the M15 chart, we may consider these as facts provided by the market supporting the bearish view and 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.
(Note: You can learn about a Killer Forex Strategy “Double Trend Line Principle” 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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If you have any further questions, don’t hesitate to drop a comment below!
Happy Trading!
Arvinth Akash
Traders Academy Club Team.
