Hi Traders! GBPAUD technical analysis and short term forecast post is here. The way I would like to analyze the chart for setups is based on multi-timeframe confirmations because in my POV if we get more evidences on different timeframes for the same direction then it makes the setup much more reliable. 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! Let’s start our analysis from the highest timeframe which will be the daily chart here.
GBPAUD D1(Daily) Chart Analysis – Heikin Ashi Candles, Bearish Hidden Divergence, ADX Indicator
On the daily chart, based on the Heikin Ashi candles we can see that currently, we have strong bearish bodies in downward moving market conditions so it basically reflects a bearish environment. We may consider this as an evidence supporting the bears. In addition to this, the price has created a bearish hidden divergence between the first high that has formed at 1.92205 and the second high that has formed at 1.77192 based on the MACD indicator, which we may consider as another evidence of bearish pressure. Also, 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. So everything looks good here for the bears and we may now move down to lower timeframe and look for evidences supporting this short term bearish view.
GBPAUD H1(1 Hour) Chart Analysis – Bearish Divergence, Bearish Trend Pattern, ADX Indicator
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.
Technical Analysis & Forecast Summary
GBPAUD D1(Daily) Chart Analysis
- Heikin Ashi Candles, Bearish Hidden Divergence, ADX Indicator
GBPAUD H1(1 Hour) Chart Analysis
- Bearish Divergence, Bearish Trend Pattern, ADX Indicator
Trading Tips
It is always recommended to look for confirmations before you jump into any trade. If you are not sure about how to trade this short term sell setup then you can use any setup and strategy that you have in your arsenal to look for bearish moves and join this sell trade.
Also, don’t forget to protect your sell trade using a stop loss and make sure to set a target and keep a proper risk/reward ratio.
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Arvinth Akash
Traders Academy Club Team
