Hi Traders! GBPCHF short and mid term forecast is here. The way I would like to analyze the chart for setups is based on multi-timeframe confirmations because in my POV if we get more evidences on different timeframes for the same direction then it makes the setup much more reliable. 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! Let’s start our analysis from the highest timeframe which will be the daily chart here.
GBPCHF D1(Daily) Chart Analysis – Lower Lows, ADX Indicator
On the daily chart, after the strong bearish move, we had a correction in the form of double wave to the upside with the price reaching a strong resistance zone, respected it and bounced lower from this zone. The price which is moving lower has currently broken below the last low at 1.22787 and has created lower lows based on the MACD indicator which is a sign of gaining momentum to the bearish side. 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. Currently, it looks like a pullback is happening and I basically, expect the price to move lower further here after this pullback.
GBPCHF H1(1 Hour) Chart Analysis – Strong Support Zone, Bullish Convergence, Bullish Hidden Divergence
Looking at the H1 chart, we could see that the price which was moving lower has reached a strong support zone, respected it and bounced higher from this zone. Also, the price which was moving lower created a bullish divergence that has formed between the first low that has formed at 1.22193 and the second low that has formed at 1.21961 based on the MACD indicator. Then the price moved higher and broke above the last high at 1.22608 creating higher highs, thus forming a classical setup of bullish divergence followed by bullish convergence. Hence as per the book scenario, after a bullish convergence, we may look for corrections to happen and then further continuation to the upside. Currently, it looks like a correction is happening. Also, the price which is currently moving lower has created a bullish hidden divergence that has formed between the first low that has formed at 1.21961 and the second low that has formed at 1.22901 based on the MACD indicator which we may consider as evidence of bullish pressure. So based on all this, my short expectation is bullish and my mid term expectation is bearish here.
Technical Analysis & Forecast Summary
GBPCHF D1(Daily) Chart Analysis
- Lower Lows, ADX Indicator
GBPCHF H1(1 Hour) Chart Analysis
- Strong Support Zone, Bullish Convergence, Bullish Hidden Divergence
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 buy and mid term sell setup then you can use any setup and strategy that you have in your arsenal to look for bullish and bearish moves and join this buy and sell trade.
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Arvinth Akash
Traders Academy Club Team
