Hi Traders! Today I am sharing with you the GBPCAD technical analysis and short term forecast post. 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! here). Now, let’s start our analysis from the highest timeframe which will be the daily chart here.
GBPCAD D1(Daily) Chart Analysis – Psychological Level, Bullish Divergence, Parabolic Sar
On the daily chart, the price which was moving lower reached the psychological level 1.55 respected it and bounced higher from this zone. Also, we could see that the price which was moving lower has created a bullish divergence between the first low that has formed at 1.57771 and the second low that has formed at 1.54828 based on the MACD indicator, we may consider these as evidences 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. Also, currently there are no signs opposing this short term bullish view. 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 H4(4 Hours) Chart Analysis – Bullish Convergence, Two Strong Support Zones
On the H4 chart, the price which was moving lower created a bullish divergence that has formed between the first low that has formed at 1.57091 and the second low that has formed at 1.54828 based on the MACD indicator. The price then moved higher and broke above the last high at 1.58830 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. Also, 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 hold my short term view remains bullish here and I expect the price to move higher further.
Technical Analysis & Forecast Summary
GBPCAD D1(Daily) Chart Analysis
- Psychological Level, Bullish Divergence, Parabolic Sar
GBPCAD H4(4 Hours) Chart Analysis
- Bullish Convergence, Two Strong Support Zones
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