GBPUSD Short Term Forecast Follow Up And Update

Hi Traders! GBPUSD short term forecast follow up and update is here. On February 16th 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 Traders Academy Club. Spoiler alert – free memberships are available!

My Idea

On the H4 chart, based on the Heikin Ashi candles we can see that currently, we have strong bullish bodies in upward moving market conditions so it basically reflects a bullish environment. Also, we could see that the price which was moving higher has created higher highs based on the MACD indicator, which is a sign of gaining momentum towards the bullish side. After the first move to the upside currently it looks like a flat correction is happening in the form of a range. This range is formed by the highs and lows reaching parallel support and resistance zones. The price which is respecting this range so far has reached the bottom of this range, respected it and bounced higher from this zone. Currently the price has reached the middle of this range. If we get a valid breakout above the top of the range we may then consider it as a validation for this short term bullish view and may expect the price to move higher further towards the key resistance zones.

 

GBPUSD H4(4 Hours) Chart Current Scenario

In this pair based on the above-mentioned analysis, my short term view was bullish here and I was expecting the price to move higher further. Also, I mentioned that “If we get a valid breakout above the top of the range we may then consider it as a validation for this short term bullish view and may expect the price to move higher further towards the key resistance zones”. The price action didn’t follow my analysis here, the validation for the bullish view which is a valid breakout above the top of the range didn’t happen here. Alternatively, the price moved lower and broke below the bottom of the range and held below it, thus invalidating the short term bullish view. My current view on this pair is neutral.
Even though we had facts supporting the bullish view here, the validation for the bullish view which is a valid breakout above the top of the range didn’t happen here. The price which bounced higher from the bottom of the range didn’t break above the top of the range. Then as you can see in the image above how the price moved lower further and broke below the bottom of the range after that, thus invalidating this short term bullish view. This is why we should always trade based on the facts and hints provided by the market and take the right actions according to that.

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 yet another good example of this scenario.

 

Happy Trading!

Arvinth Akash
Traders Academy Club Team

 

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