Hi Traders! GBPCHF 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.
GBPCHF D1(Daily) Chart Analysis – Strong Resistance Zone, Range, Bearish Divergence, Parabolic Sar
On the daily chart, we have a strong resistance zone and the price which was moving higher reached this zone, respected it and is moving lower from this zone. Also, the price which was moving inside a range, created a false break of this range and has currently moved back inside it. In addition to this, we have a bearish divergence that has formed between the first high that has formed on 11th August 2021 and the second high that has formed on 17th September 2021 based on the MACD indicator which we may consider as evidence of bearish pressure. Looking at the Parabolic Sar we could see that the dots are above the price which we may consider as another evidence of bearish pressure and also, there are currently no signs opposing this short term bearish view. So everything looks good here for the bears and we may now move down to one timeframe lower and look for evidences supporting this short term bearish view.
GBPCHF H4(4 Hours) Chart Analysis – Bearish Convergence, Bearish Hidden Divergence, Strong Resistance Zones
On the H4 chart, the price which was moving higher has created a bearish divergence between the first high that has formed at 1.27964 and the second high that has formed at 1.28184 based on the MACD indicator. The price then moved lower and broke below the last low at 1.26595 thus forming a classical setup of bearish divergence followed by bearish convergence, we may consider these as evidences of bearish pressure. Generally, after a bearish convergence we may look for corrections and then further continuation lower. Currently, it looks like a correction is happening and in addition to this, the price has created a bearish hidden divergence that has formed between the first high that has formed at 1.28184 and the second high that has formed at 1.27063 based on the MACD indicator which we may consider as yet another evidence of bearish pressure. Until the two strong resistance zones hold my short term view remains bearish here and I expect the price to move lower further.
Technical Analysis & Forecast Summary
GBPCHF D1(Daily) Chart Analysis
- Strong Resistance Zone, Range, Bearish Divergence, Parabolic Sar
GBPCHF H4(4 Hours) Chart Analysis
- Bearish Convergence, Bearish Hidden Divergence, Strong Resistance Zones
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 sell setup then you can use any setup and strategy that you have in your arsenal to look for bearish moves and join this sell trade.
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Arvinth Akash
Traders Academy Club Team
