Hi Traders! GBPJPY short term forecast follow up and update is here. On August 4th I shared this “GBPJPY Short Term Forecast And Technical Analysis” 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
Looking at the H1 chart, we could see that, we have a key resistance zone that has formed based on the 61.8%(163.698) Fibonacci retracement level of the strong bearish move and the 100%(164.423)Fibonacci expansion level of the first wave of the correction. The price which was moving higher has reached this zone, respected it and is bouncing lower from this zone. In addition to this, we had a bearish divergence that has formed between the first high that has formed at 162.681 and the second high that has formed at 163.952 based on the MACD indicator, we may consider this as evidence of bearish pressure. Also, currently there are no signs opposing this short term bearish view. So based on all this, until the key resistance zone holds my short term view remains bearish here and I expect the price to move lower further.
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 key resistance zone holds. On the H1 chart, the short term bearish move happened exactly as I expected it to. After the bearish divergence, the price moved lower as per the plan and provided a short move to the downside. We then had a pullback with the price reaching the key resistance zone again, respected it and then it bounced lower from this zone delivering 370+ pips move!
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 163.361 and the second high that has formed at 163.839 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 a fantastic move to the downside.
(Note: You can learn about a Killer Forex Strategy “Double Trend Line Principle” here)
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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Happy Trading!
Arvinth Akash
Traders Academy Club Team.
