Hi Traders! Today I share with you my GBPUSD forecast and technical analysis, we do our analysis on the MetaTrader4 platform (MT4). Some very interesting, useful tips and hacks about the MT4 platform could be found here. As we do in every technical analysis post we are going to perform the multi-timeframe analysis on this pair in order to find possible trading opportunities. 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! Let’s start our analysis now from the highest timeframe which will be the weekly chart.
GBPUSD W1(Weekly) Chart Analysis – Key Resistance Zone, Bearish Divergence, Stochastic Oscillator
On the weekly chart, we have a key resistance zone that has formed by the 161.8% (1.41102) Fibonacci expansion level of the first wave, the 100%(1.40511) Fibonacci expansion level of the second wave, and the psychological level 1.40. The price which is moving higher has currently reached this key resistance zone. In addition to this, we have a bearish divergence that has formed between the first high that has formed on 30th August 2020 and the second high that has formed on 21st February 2021 based on the MACD indicator which we may consider as evidence of bearish pressure. Also based on the Stochastic Oscillator, we could see that the price has reached its extreme, we may consider this as yet another evidence of bearish pressure. We may now move down to lower timeframe and see if we can find evidences supporting this bearish view.
GBPUSD H4(4 Hours) Chart Analysis – Bearish Trend Pattern, Stochastic Oscillator, Strong Resistance Zone
On the H4 chart, we could see that the price which is moving lower has created a bearish trend pattern in the form of three lower highs, lower lows we may consider this 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. In addition to this based on the Stochastic Oscillator, we could see that the price has reached its extreme here as well, we may consider this as yet another evidence of bearish pressure. So everything looks good here for the bears and until this strong resistance zone (marked in blue) shown in the image below holds my view remains bearish here and I expect the price to continue lower further.
Technical Analysis & Forecast Summary
GBPUSD W1(Weekly) Chart Analysis
- Key Resistance Zone, Bearish Divergence, Stochastic Oscillator
GBPUSD H4(4 Hours) Chart Analysis
- Bearish Trend Pattern, Stochastic Oscillator, Strong Resistance Zone
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 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.
You will also find a pretty extensive database of educational materials here in the blog – just use the search or check out the Forex Education section above.
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Happy Trading!
Yordan Kuzmanov
Chief Trader at the Traders Academy Club
