Hi Traders! GBPJPY short term forecast update and follow up is here. On August 18th 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
On the H4 chart the price which was moving higher reached a strong resistance zone (marked in red), respected it and bounced lower from this zone. The price then moved lower further and broke below the last low at 151.163 thus forming lower lows based on the MACD indicator, which we may consider as evidence of bearish pressure. In addition to this, the ADX indicator gave a bearish signal here as well at the cross of -DI (red line) versus +DI (green line), and the main signal line (silver line) reads value over 25, we may consider this as another evidence of bearish pressure. Also, we had a strong support zone and the price which was moving lower has broken below this zone and is holding below it. We may consider this as yet another evidence of bearish pressure. Currently this strong support zone is acting as a strong resistance zone for us. Until this resistance zone (marked in green) holds my short term view remains bearish here and I expect the price to move lower further.
In this pair based on the multi-timeframe analysis my 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. The price which was moving higher reached the strong resistance zone, respected it and moved lower from this zone. The price then moved lower further as I expected it to and delivered around 180 pips moves so far.
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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!
Yordan Kuzmanov
Chief Trader at the Traders Academy Club
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