Hi Traders! GBPJPY short term forecast update and follow up is here. On November 29th I shared this “GBPJPY Technical Analysis And Short Term Forecast” 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 H1 chart, the price which was moving higher reached a strong resistance zone, respected it and bounced lower from this zone. Also, the price which is moving lower has created a bearish trend pattern in the form of three lower highs, lower lows which we may consider as evidence of bearish pressure. Generally, after a bearish trend pattern, we may expect corrections and then further continuation lower. Currently it looks like a correction is happening. Also, based on the Heikin Ashi candles we can see that currently, we have strong bearish bodies in downward moving market conditions so it basically reflects a bearish environment. So the bottom line here is that, everything looks good here for the bears and I expect the price to move lower further in the short term after pullbacks until the strong resistance zone (marked in red) shown in the image below holds.
GBPJPY H1(1 Hour) Chart Current Scenario
In this pair based on the above mentioned analysis my short term view was bearish and I was expecting the price to move lower further until the strong resistance zone holds. The price action followed my analysis exactly as I expected it to here. After the bearish trend pattern, the pullback that I was looking for happened and then the price moved lower further as I expected it to and delivered an extraordinary 900+ pips move to downside!
On the M15 chart, the market provided us with various facts supporting the bearish view. The price which was moving higher created a bearish divergence between the first high that has formed at 187.245 and the second high that has formed at 187.514 based on the MACD indicator, which we may consider as evidence of bearish pressure. The price then moved lower and broke below the most recent uptrend line. We may consider these as facts provided by the market supporting the bearish view and also there we no signs opposing this bearish view. Then as you can see in the image below how the price moved lower further and provided an extraordinary move to the downside.
So, traders, this is why I wanted to show this example to help you understand how important it is to follow the facts. The facts were supporting the bearish view here and there were no signs against it. When the facts do happen as we expected you can see how the price perfectly moved as per the plan. Because these are the kind of hints the market provides us at the majority of the time and it’s our obligation as traders to be able to listen to these things that the market tells us and we should try to make the right actions accordingly.
For similar trade ideas and much more I invite you to
Also, you can get one of our strategies free of charge. You will find all the details here
Download our best forex indicators here
If you have any further questions, don’t hesitate to drop a comment below!
Happy Trading!
Arvinth Akash
Home Trader Club Team.
