Hi Traders! GBPUSD short term forecast follow up and update is here. On August 13th I shared this “GBPUSD Short Term Forecast” in Trading View. In this post, lets 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:
GBPUSD H4(4 Hours) Chart Current Scenario
On the H4 chart, I was expecting the price to continue higher further in the short term until the key support zone holds. The price moved higher as per my idea and the key support zone was holding, most importantly there were no contradictory signs. The price then moved higher further delivering around 220+ pips move.
On the H4 chart, we had a correction in the form of double wave down and the price was holding above the key support zone. We had a good downtrend line that had formed, we also had a bullish divergence that had formed between the first low that has formed at 1.30090 and the second low that has formed at 1.30056 based on the MACD indicator. The price first created a false break of this dynamic resistance and then it moved higher and provided a valid breakout above this dynamic resistance.
Also on the H1 chart after the H4 downtrend line breakout, we had another pullback in the form of double wave down and then the price broke above the most recent downtrend line. We may consider these as hints provided by the market validating the bullish view.
(Note: You can learn about a Killer Forex Strategy “Double Trend Line Principle” here)
Currently, on the H4 chart, we have a bearish divergence in play, this is something that we need to pay attention to. As I always suggest when you see contradictory signs like this, then you should consider managing your trade and secure your profits (cash out or partial cash out or trailing protections or partial hedge, etc.. depending on the strategy that you work with).
Note: If you want to learn about Money Management you can find it here
We need to understand the fact that the market doesn’t care if we need to buy or sell an instrument the market does what it has to do. As traders we have to hold our horses, we shouldn’t expect our wishes or rumors to happen, we should wait for the facts to happen and when the facts fit in then that’s our opportunity to do any sort of trading. As long as it didn’t happen everything remains as an expectation for us. As you can see in the example above the fact happened as we expected in the form of bullish divergence, downtrend line breakout on both H4 and H1 and the price moved higher exactly as I expected it to. This is why we should always trade based on the facts.
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To your success,
Vladimir Ribakov
Certified Financial Technician
