Hi Traders! GBPCAD forecast follow up and update is here. On May 11th I shared this “GBPCAD Technical Analysis And 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:
Looking at the H4 chart we have a bullish divergence that has formed between the first low that has formed on 4th May 2021 and the second low that has formed on 7th May 2021 based on the MACD indicator, which we may consider as evidence of bullish pressure. Also the ADX indicator gave a bullish signal at the cross of +DI (green line) versus -DI (red line) and the main signal line (silver line) reads value over 25, we may consider this as another evidence of bullish pressure. If we get a valid breakout above the high at 1.71300 (marked in blue line) we may then consider it as a validation for the bullish view and may expect the price to move higher further.
GBPCAD H4(4 Hours) Chart Current Scenario
On the H4 chart my view was bullish and I mentioned that “If we get a valid breakout above the high at 1.71300 (marked in blue line) we may then consider it as a validation for the bullish view and may expect the price to move higher further”. The price action followed my analysis exactly as I expected it to, the validation for the bullish view which is a valid breakout above the high at 1.71300 happened as I expected it to. Then we had a pullback but the price was holding above the strong support zone and then the price moved higher further and delivered 140+ pips move so far.
On the H1 chart, the market provided us with various facts supporting the bullish view. The H4 chart pullback happened in the form of an ABCD pattern on the H1 chart. We also had a bullish divergence between the first low that has formed at 1.70115 and the second low that has formed at 1.70066 based on the MACD indicator. The price then moved higher and broke above the most recent downtrend line, we may consider these as facts provided by the market supporting the bullish view. Then as you can see in the image below how the price moved higher after that.
(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.
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To your success,
Vladimir Ribakov
Certified Financial Technician
