Hi Traders! GBPCHF short term forecast follow-up and update is here. On May 31st 2023 I shared this “GBPCHF 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, we could see that the price which is moving higher has broken above the most recent downtrend line and is holding above it. Also, we could see that the price which is moving higher has created higher highs based on the MACD indicator, which is a sign of gaining momentum towards the bullish side. We may consider these as other evidences of bullish pressure. In addition to this, the ADX indicator gave a bullish signal here 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. 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 based on all this, until the strong support zone 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.
GBPCHF H4(4 Hours) Chart Current Scenario
On the H4 chart, based on the above-mentioned analysis my short-term view was bullish here and I was expecting the price to move higher further after pullbacks until the strong support zone holds. After the breakout of the most recent downtrend line, the pullback that I was looking for happened with the price creating a bullish hidden divergence that has formed between the first low that has formed at 1.11452 and the second low that has formed at 1.12361 based on the MACD indicator, which we may consider as a fact provided by the market supporting the bullish view. Most importantly there were no signs opposing this bullish view. The price then moved higher further as I expected it to and delivered 260+ pips move to the upside as you can see in the image below until it was blocked by a bearish divergence.
As traders we always have two choices, the first one is to fall in love with our analysis and try to convince the market and expect the price to move in the direction per our wish. The second one is to follow the facts that the market provides us and make the right actions according to that. As you know the first option won’t help us and as you can see in the example above what happened when we followed the facts that the market hinted to us and took the right action according to that.
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Happy Trading!
Arvinth Akash
Home Trader Club Team.
