GBPUSD Short Term Forecast Follow Up And Update

Hi Traders! GBPUSD short term forecast follow up and update is here. On May 26th I shared this “GBPUSD Technical Analysis And Short Term Forecast” 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 is moving higher has currently reached a key resistance zone that has formed based on the 61.8%(1.25421) and 100%(1.26734) Fibonacci expansion levels of the first wave. Also, we have a bearish divergence that has formed between the first high that has formed at 1.25009 and the second high that has formed at 1.26206 based on the MACD indicator which we may consider as evidence of bearish pressure. In addition to this, based on the Stochastic Oscillator we could see that the price has reached its extreme here as well which we may consider as yet another evidence of bearish pressure. So everything looks good here for the bears. If we get a valid breakout below the low at 1.24747 we may then consider it as a validation for this short term bearish view and may expect the price to move lower further.

GBPUSD H4(4 Hours) Chart Current Scenario

On the H4 chart, the price action followed my analysis exactly as I expected it to. The price which was moving higher reached the key resistance zone, respected it and moved lower from this zone. In addition to this, the validation for the short term bearish view which is a valid breakout below the low at 1.24747 happened as I expected it to, we then had a pullback and then the price moved lower further delivering around 600 pips move so far!
You can see this move clearly on the H1 chart below.
The market provided us with various facts supporting the bearish view here, the first one we had here is the bearish divergence that has formed between the first high that has formed on 23rd May 2022 and the second high that has formed on 27th May 2022 based on the MACD indicator. Then the price moved lower and broke below the most recent uptrend line, we may consider these as evidences of bearish pressure. The price then moved lower further and broke below the low at 1.24747 thus validating this short term bearish view and then it provided a fantastic move to the downside as you can see in the image below.

(Note: You can learn about a Killer Forex Strategy “Double Trend Line Principle” here)
So traders when it comes to trading, there are various important factors that we need to pay attention to, just because we have a good setup doesn’t mean that we can enter the trade randomly and it will pay us huge profits. First of all, we need to validate the entry and we should have a perfect entry plan to get into the trade which is a key factor when it comes to trading. This GBPUSD short term forecast is a perfect example of this scenario.