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 H4 chart here.
GBPCAD H4(4 Hours) Chart Analysis – Key Support Zone, Bullish Divergence, RSI Indicator, Parabolic Sar
On the H4 chart, the price which was moving lower has reached a support zone formed by the 161.8%(1.51692) Fibonacci expansion level of the first wave, respected it and is currently bouncing higher from this zone. Also, we have a bullish divergence that has formed between the first low that has formed at 1.53320 and the second low that has formed at 1.52094 based on the MACD indicator which we may consider as evidence of bullish pressure. Also, we have this bullish divergence on the RSI indicator as well, which we may consider as yet another evidence of bullish pressure. In addition to this, based on the Parabolic Sar we could see that the dots are below the price, 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 look for evidences supporting this short term bullish view.
GBPCAD H1(1 Hour) Chart Analysis – Multiple False Breaks, Bullish Convergence
On the H1 chart, the price which is moving lower has created multiple false breaks which we may consider as evidence of bullish pressure. In addition to this, we have a bullish divergence that has formed between the first low that has formed at 1.52268 and the second low that has formed at 1.52094 based on the MACD indicator. The price then moved higher and broke above the last high at 1.52806 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. Until the key support zone shown in the image below (marked in blue) holds my short term view remains bullish here. A valid breakout above the high at 1.52860 would be the validation for this bullish view.
Technical Analysis & Forecast Summary
GBPCAD H4(4 Hours) Chart Analysis
- Key Support Zone, Bullish Divergence, RSI Indicator, Parabolic Sar
GBPCAD H1(1 Hour) Chart Analysis
- Multiple False Breaks, Bullish Convergence
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 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
