Hi Traders! GBPCAD short term forecast update and follow up is here. On February 7th, 2024 I shared this “GBPCAD 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 Home Trader Club. Spoiler alert – free memberships are available!
My Idea
On the H4 chart, the price which is moving higher has created a bullish trend pattern in the form of three higher highs, higher lows, we may consider this as evidence of bullish pressure. Generally, after a bullish trend pattern, we may expect corrections and then potential continuation higher. Currently, it looks like a correction is happening and we could see that the price which is moving lower created a bullish divergence between the first low that formed at 1.69744 and the second low that has formed at 1.69199based on the MACD indicator, which we may consider as evidence of bullish pressure. Also, there are no signs opposing this short term bullish view at the moment. In addition to this, we had two strong resistance zones that has formed and the price which was moving higher has broken above these zones and is holding above them. After the breakout these strong resistance zones are acting as two strong support zones for us. Until both these strong support zones 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.
In this pair, based on my technical analysis I mentioned that “Until both these strong support zones 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”. The price action followed my analysis exactly as I expected it to here. The price which was moving lower reached the first strong support zone, respected it and bounced higher from this zone. In addition to this, the price which was moving lower created a bullish divergence between the first low that has formed at 1.69744 and the second low that has formed at 1.69199 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. The price then moved higher and delivered a fantastic move to the upside as you can see in the image below!
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 with the majority of the time 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 accordingly.
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Happy Trading!
Arvinth Akash
Home Trader Club Team.
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