Hi Traders! GBPJPY Technical Analysis And Short Term Forecast is here. The way I would like to analyze the chart for setups is based on multi-timeframe confirmations because in my POV if we get more evidences on different timeframes for the same direction then it makes the setup much more reliable. We do our analysis on the MetaTrader4 platform (MT4), some very interesting, useful tips and hacks about the MT4 platform could be found here. 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! Now, let’s start our analysis from the highest timeframe which will be the daily chart here.
GBPJPY D1(Daily) Chart Analysis – Bearish Divergence, RSI Indicator, Stochastic Oscillator
On the daily chart, we could see that the price which is moving higher has created a bearish divergence between the first high that has formed at 184.006 and the second high that has formed at 186.651 based on the MACD indicator. we may consider this as evidence of bearish pressure. We also have this bearish divergence on the RSI indicator as well, which we may consider as another evidence of bearish pressure. In addition to this, based on the Stochastic Oscillator we could see that the price has reached its extreme which we may consider as yet another evidence of bearish pressure. Also, currently there are no signs opposing this short term bearish view. So everything looks good here for the bears and we may now move down to lower timeframe and look for evidences supporting this short term bearish view.
GBPJPY H4(4 Hours) Chart Analysis – Key Resistance Zone, Bearish Divergence, RSI Indicator, Volumes Indicator
On the H4 chart, the price reached a key resistance zone that has formed based on the 100%(187.310) Fibonacci expansion level of the first wave. Also, we have a bearish divergence that has formed between the first high formed at 186.461 and the second high formed at 186.757 based on the MACD indicator which we may consider as evidence of bearish pressure. In addition to this, we have this bearish divergence on the RSI indicator as well, which we may consider as yet another evidence of bearish pressure. Also, based on the Volumes indicator we could see that the volumes are dropping, we may consider this as yet another evidence of bearish pressure. So everything looks good here as well for the bears as and until the key resistance zone (marked in red) shown in the image below holds my short term view remains bearish here. A valid breakout below the last low at 184.545 would be the validation for this short term bearish view.
Technical Analysis & Forecast Summary
GBPJPY D1(Daily) Chart Analysis
- Bearish Divergence, RSI Indicator, Stochastic Oscillator
GBPJPY H4(4 Hours) Chart Analysis
- Key Resistance Zone, Bearish Divergence, RSI Indicator, Volumes Indicator
Trading Tips
It is always recommended to look for confirmations before you jump into any trade. If you are not sure about how to trade this short-term sell setup then you can use any setup and strategy that you have in your arsenal to look for bearish moves and join this sell trade.
Also, don’t forget to protect your sell trade using a stop loss and make sure to set a target and keep a proper risk/reward ratio.
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Arvinth Akash
Home Trader Club Team.
