Hi Traders! GBPJPY forecast follow up and update is here. On July 29th I shared this “GBPJPY Forecast And Technical Analysis” post in my 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 Traders Academy Club. Spoiler alert – free memberships are available!
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Now let’s summarize the idea first:
On the H4 chart, the price which was moving higher had created a bullish trend pattern. We then had a correction with a bullish hidden divergence. Until the important support zone shown in the chart below holds I expected the price to continue higher further. I also mentioned that if we get a valid breakout below this important support zone then this bullish view will be invalidated.
GBPJPY H4 (4 Hours) Chart Current Scenario
In this pair my view was bullish, we had a bullish trend pattern followed by a correction and until the key support zone holds, I was expecting the price to move higher further. On the H4 chart, the price action followed my analysis and moved higher further as I expected it to and delivered 300+ pips move.
Also on the H1 chart, the price which was moving higher created a bullish trend pattern followed by a correction. We then had a bullish hidden divergence between the first low that has formed at 136.057 and the second low that has formed at 136.782 based on the histogram of the MACD indicator. We may consider these as facts provided by the market supporting the bullish view. Most importantly there were no contradictory signs.
These are important things that we need to pay attention to. So if you are still involved in the buys then this is a very important place to consider and manage your trade (cash out or partial cash out or trailing protections or partial hedge, etc.. depending on the strategy that you work with).
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 as 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 us and took the right action according to that.
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