Hi Traders! GBPJPY short term forecast follow up and update is here. On September 20th 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 Traders Academy Club. Spoiler alert – free memberships are available!
My Idea
On the H1 chart, 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, we had two strong support zones that has formed and the price which was moving lower has broken below these zones and is holding below them, we may consider this as yet another evidence of bearish pressure. Currently, these strong support zones are acting as strong resistance zones for us. Until these two strong resistance zones (marked in red) shown in the image below hold my short term view remains bearish here and I expect the price to move lower further.
In this pair my short term view was bearish and I was expecting the price to move lower further until the two strong resistance zones hold. The price action followed my analysis exactly as I expected it to here. After the bearish trend pattern, the price which was moving higher reached the first strong resistance zone, respected it and then it bounced lower from this zone. The price then moved lower further and has delivered an extraordinary 1500+ pips move to the downside as you can see in the image below!
On the H1 chart, the market provided us with various facts supporting the bearish view. After the bearish trend pattern we had a pullback and the price which was moving higher created a continuing bearish divergence between the first high that has formed at 163.944 and the second high that has formed at 164.437 based on the MACD indicator. 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 after that and provided an extraordinary move to the downside!
(Note: You can learn about a Killer Forex Strategy “Double Trend Line Principle” here)
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 majority of the times 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.
Not sure how to enter a trade? Spot reversals (bounces)? Not sure how to spot breakouts?
I invite you to
Also, you can get one of our strategies free of charge. You will find all the details here
If you have any further questions, don’t hesitate to drop a comment below!
Happy Trading!
Arvinth Akash
Traders Academy Club Team.
Hi Traders! Arvinth here from the Home Trader Club team. The weekly summary and, review of November…
U.S. stock index futures were subdued on Thursday, as AI-heavyweight Nvidia's revenue forecast failed to…
Hi Traders! Litecoin short term forecast and technical analysis is here. We do our analysis…
Hi Traders! NASDAQ short term forecast follow up and update is here. On September 4th…
Hi Traders! EURCAD technical analysis and short term forecast is here. We do our analysis…
Hi Traders! GBPNZD short term forecast update and follow up is here. On Sep 3rd,…
