Hi Traders! GBPUSD short term forecast follow up and update is here. On July 25th, 2024 I shared this “GBPUSD 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 Home Trader Club. Spoiler alert – free memberships are available!
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My Idea
On the H4 chart, the price which is moving higher has created a bullish trend pattern in the form of three higher highs, higher lows, we may consider this as evidence of bullish pressure. Generally, after a bullish trend pattern, we may expect corrections and then potential continuation higher. Currently, it looks like a correction is happening and in addition to this, based on the Stochastic Oscillator we could see that the price has reached it’s extreme. Also, there are no signs opposing this short term bullish view at the moment. In addition to this, we had two strong resistance zones that has formed and the price which was moving higher has broken above these zones and is holding above them. After the breakout these strong resistance zones are acting as two strong support zones for us. There are two possible scenarios from here, the price might move higher from the current zone or alternatively if it moves lower then the next area to look for bullish setups with bullish evidences would be the second strong support zone. Until both these strong support zones (marked in green) shown in the image below holds my short term view remains bullish here and I expect the price to move higher further.
In this pair, based on my technical analysis I mentioned that “Until both these strong support zones shown in the image below (marked in green) holds my short term view remains bullish here and I expect the price to move higher further”. The price action followed my analysis exactly as I expected it to here. The price which was moving lower respected the second strong support zone and then it bounced higher from this zone. The price then moved higher further and delivered around 770+ pips move!
On the H4 chart, the market provided us with various facts supporting the bullish view. The price which was moving lower created a bullish divergence between the first low that has formed at 1.27067 and the second low that has formed at 1.26643 based on the MACD indicator. The price then moved higher and broke above the most recent downtrend line, we may consider these as facts provided by the market supporting the bullish view. Then as you can see in the image below how the price moved higher after that and provided a fantastic move to the upside!
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 to us and took the right action according to that.
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Happy Trading!
Arvinth Akash
Home Trader Club Team.
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