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 Home Trader Club Spoiler alert – free memberships are available! Let’s start our analysis from the highest timeframe which will be the daily chart here.
On the daily chart, currently, it looks like a correction is happening in the form of a double wave down. Also, we have a strong support zone that has formed and the price which was moving lower reached this strong support zone respected it and is currently bouncing higher from this zone. Also, we have a bullish divergence that has formed between the first low that formed on 3rd January 2023 and the second low that formed on 2nd February 2023 based on the histogram of the MACD indicator which we may consider as evidence of bullish pressure. In addition to this, the price which was moving higher has broken above the most recent downtrend line, which we may consider as another evidence of bullish pressure. Also, we have this downtrend line breakout on the RSI indicator as well, which we may consider as yet another evidence of bullish pressure. So everything looks good here for the bulls and we may now move down to lower timeframe and see if we can find evidences supporting this short-term bullish view.
(Note: You can learn about a Killer Forex Strategy “Double Trend Line Principle” here)
On the H4 chart, we have a bullish rally and currently, it looks like this bullish rally is about to continue. Based on the Heikin Ashi candles we can see that currently, we have strong bullish bodies in upward-moving market conditions so it basically reflects a bullish environment. In addition to this, we could see that the price which was moving higher has created higher highs based on the MACD indicator, which is a sign of gaining momentum towards the bullish side. Also, the ADX indicator gave a bullish signal here at the cross of +DI (green line) versus -DI (red line) and the main signal line (silver line) reads a value over 25, we may consider this as another evidence of bullish pressure. In addition to this, currently, there are no signs opposing this bullish view. Also, we had a strong resistance zone and the price which was moving higher has broken above this zone and is holding above it. After the breakout, this strong resistance zone is acting as a strong support zone for us. So based on all this, until the strong support zone shown in the image below(marked in green) holds my short-term view remains bullish here and I expect the price to move higher further after pullbacks.
GBPAUD D1(Daily) Chart Analysis
GBPAUD H4(4 Hours) Chart Analysis
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 buy setup then you can use any setup and strategy that you have in your arsenal to look for bullish moves and join this buy trade.
Also, don’t forget to protect your buy trade using a stop loss and make sure to set a target and keep a proper risk/reward ratio.
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Happy Trading!
Arvinth Akash
Home Trader Club Team
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hi. But are you keeping your bearish view on gbp/cad from a recent weekly forecast ? Thanks
Hi Adrian, no, I don't.
Since the pair completed signs against the bearish view.