Hi Traders! Today’s post is about GBPJPY forecast based on technical analysis. As I do with every technical analysis post, multi-time frame analysis method will be applied in order to look for all the possible evidences that support my view on the current trading timeframe and the higher timeframe. The platform in which we perform this multi-timeframe analysis is on the MetaTrader4(MT4). You can find some useful tips and hacks about the MT4 platform here. We will start our analysis from the highest timeframe now which will be the daily chart here.
GBPJPY D1(Daily) Chart Analysis – Uptrend Line, Parabolic Sar
On the daily chart we have a good uptrend line that has formed and the price which is moving higher reached this uptrend line, created false breaks, and is holding above this dynamic support. We may consider this as an evidence of bullish pressure. Also based on the Parabolic Sar we could see that the dots are below the price which we may consider as another evidence of bullish pressure. In addition to this, there are no evidences that show the current trend is over yet. We may now move down to lower timeframe and see if we can find evidences supporting this bullish view.
GBPJPY H4(4 Hours) Chart Analysis – Bullish Trend Pattern, Bullish Hidden Divergence, Parabolic Sar, Important Support Zone
On the H4 chart, the price which is moving higher has created a bullish trend pattern in the form of three higher highs, higher lows, which we may consider as evidence of bullish pressure. Generally, after a bullish trend pattern we may expect correction to happen and then further continuation higher. Currently, it looks like the correction that we were looking for happened and the price reached an important support zone, respected it, and is moving higher. We also had a bullish hidden divergence that had formed between the first low that has formed on 17th July 2020 and the second low that has formed on 24th July 2020 based on the MACD indicator which we may consider 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 the bottom line here is that the H4 chart has evidences supporting the bullish view and until the important support zone holds I expect the price to continue higher further. If we get a valid breakout below this important support zone then this bullish view will be invalidated.
Technical Analysis & Forecast Summary
GBPJPY D1(Daily) Chart Analysis
Uptrend Line, Parabolic Sar
GBPJPY H4(4 Hours) Chart Analysis
Bullish Trend Pattern, Bullish Hidden Divergence, Parabolic Sar, Important Support Zone
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