Hi Traders! GBPUSD technical analysis and short term forecast post is here. In this pair, based on the multi-timeframe analysis method, we are going to look for the evidence on three timeframes that is on the current trading timeframe and two timeframes higher, when we get evidence that supports our view on these three timeframes this makes the setup very reliable. We do our analysis on the MetaTrader4 platform (MT4), some very interesting, useful tips and hacks about the MT4 platfor m could be found here. If you would like to learn more about the way we trade and the technical analysis we use then check out the HomeTrader Club Spoiler alert – free memberships are available! Let’s start our analysis now from the highest timeframe which will be the daily chart here.
GBPUSD D1(Daily) Chart Analysis – Key Resistance Zone, Bearish Divergence, Volumes Indicator
On the daily chart, the price reached a key resistance zone that has formed based on the 100%(1.24439) Fibonacci expansion level of the first wave and the 61.8%(1.26335) Fibonacci expansion level of the second wave. Also, we have a bearish divergence that has formed between the first high formed at 1.24463 and the second high formed at 1.24473 based on the MACD indicator which we may consider as evidence of bearish pressure. In addition to this, based on the Volumes indicator we could see that the volumes are dropping, we may consider this as yet another evidence of bearish pressure. We may now move down to one timeframe lower and look for evidence supporting this short-term bearish view.
GBPUSD H4(4 Hours) Chart Analysis – Bearish Divergence, ADX Indicator
On the H4 chart, we have a bearish divergence that has formed between the first high formed at 1.22100 and the second high formed at 1.24473 based on the MACD indicator which we may consider as evidence of bearish pressure. In addition to this, the ADX indicator gave a bearish signal here at the cross of -DI (red line) versus +DI (green line) and the main signal line (silver line) reads value over 25 which we may consider as yet another evidence of bearish pressure. So everything looks good here for the bears, we may now move down to one more timeframe lower and look for evidence supporting this short-term bearish view.
GBPUSD H1(1 Hour) Chart Analysis – Bearish Divergence, Lower Lows
On the H1 chart, we have a bearish divergence that has formed here as well, between the first high formed at 1.24350 and the second high formed at 1.24473 based on the MACD indicator which we may consider as evidence of bearish pressure. The price then moved lower and broke below the last low at 1.23128 thus creating lower lows which we may consider as another evidence of bearish pressure. So everything looks good here for the bears and until the key resistance zone (marked in red) shown in the image below holds my short-term view remains bearish here and I expect the price to move lower further.
Technical Analysis & Forecast Summary
GBPUSD D1(Daily) Chart Analysis
- Key Resistance Zone, Bearish Divergence, Volumes Indicator
GBPUSD H4(4 Hours) Chart Analysis
- Bearish Divergence, ADX Indicator
GBPUSD H1(1 Hour) Chart Analysis
- Bearish Divergence, Lower Lows
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 short-term 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.
Not sure how to enter a trade? Spot reversals (bounces)? Not sure how to spot breakouts?
I invite you to
And improve your trading with us.
Also, you can get one of our strategies free of charge. You will find all the details here
Download our best forex indicators here
If you have any further questions, don’t hesitate to drop a comment below!
Happy Trading!
Arvinth Akash
Home Trader Club Team.
