Hi Traders! GBPCHF technical analysis and short term forecast 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 – Lower Lows, Bearish Hidden Divergence, Stochastic Oscillator
Looking at the daily chart, we could see that the price which was moving lower has created lower lows based on the MACD indicator which is a sign of gaining momentum towards the bearish side. Currently, it looks like a correction is happening and in addition to this, we could see that the price has created a bearish hidden divergence between the first high that has formed at 1.17167 and the second current high that has formed at 1.13959 based on the MACD indicator, which we may consider as evidence of bearish pressure. Also, based on the Stochastic Oscillator we could see that the price has reached its extreme which we may consider as yet another evidence of bearish pressure. So everything looks good here for the bears and we may now move down to lower timeframe and look for evidences supporting this short term bearish view.
GBPCHF H4(4 Hours) Chart Analysis – Key Resistance Zone, Bearish Divergence
On the H4 chart, the price which was moving higher has reached a key resistance zone that has formed based on the 161.8%(1.14275) Fibonacci expansion level of the first wave and the 61.8%(1.14338) Fibonacci expansion level of the second wave. Also, we have a bearish divergence that has formed supporting the daily bearish hidden divergence, between the first high that has formed at 1.12858 and the second high that has formed at 1.13959 based on the MACD indicator which we may consider as evidence of bearish pressure. So everything looks good here for the bears. Until the key resistance zone (marked in red) shown in the image below holds my short term view remains bearish here. A valid breakout below the most recent uptrend line would be the validation for this bearish view.
Technical Analysis & Forecast Summary
GBPCHF D1(Daily) Chart Analysis
- Lower Lows, Bearish Hidden Divergence, Stochastic Oscillator
GBPCHF H4(4 Hours) Chart Analysis
- Key Resistance Zone, Bearish Divergence
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.
Also, don’t forget to protect your sell trade using a stop loss and make sure to set a target and keep a proper risk/reward ratio.
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Arvinth Akash
Traders Academy Club Team
