Hi Traders! GBPCAD short term forecast and technical analysis 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.
On the daily chart, the price which was moving lower has reached a strong support zone, respected it and is bouncing higher form this zone. In addition to this, we also have a bullish divergence that has formed between the first low that has formed at 1.68914 and the second low that has formed at 1.67185 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 yet another evidences 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 bullish view.
On the H4 chart, we had a bullish divergence that has formed between the first low that has formed at 1.67339 and the second low that has formed at 1.67185 based on the MACD indicator. Then the price moved higher and broke above the last high at 1.69127 creating higher highs, thus forming a classical setup of bullish divergence followed by bullish convergence. Hence as per the book scenario, after a bullish convergence, we may look for corrections to happen and then further continuation to the upside. Currently it looks like a correction is happening. In addition to this, the ADX indicator gave a bullish signal here as well 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 yet another evidence of bullish pressure. Until the strong support zone (marked in green) shown in the image below holds, I expect the price to move higher further after pullbacks.
GBPCAD D1(Daily) Chart Analysis
GBPCAD 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
Traders Academy Club Team
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