Hi Traders! GBPCHF short term forecast and technical analysis 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.
You can watch the video explanation of this idea here
- 1 GBPCHF D1(Daily) Chart Analysis – Bearish Channel, Stochastic Oscillator
- 2 GBPCHF H4(4 Hours) Chart Analysis – Strong Resistance Zone, Bearish Divergence, ADX Indicator
- 3 GBPCHF H1(1 Hour) Chart Analysis – Multiple False Breaks, Bearish Convergence, ADX Indicator
- 4 Technical Analysis & Forecast Summary
- 5 Trading Tips
GBPCHF D1(Daily) Chart Analysis – Bearish Channel, Stochastic Oscillator
On the daily chart, we have a bearish channel that has formed which started on 5th April 2021. This channel is formed by the highs and lows reaching parallel support and resistance zones. Currently, the price which is moving higher is nearing the top of this channel. Until the top of this channel holds my short term view remains bearish here. Also, based on the Stochastic Oscillator, we could see that the price has reached its extreme which we may consider as evidence of bearish pressure. Also, currently there are no signs opposing this short term bearish view. We may now move down to lower timeframe and see if we can find evidences supporting this bearish view.
GBPCHF H4(4 Hours) Chart Analysis – Strong Resistance Zone, Bearish Divergence, ADX Indicator
On the H4 chart, we have a strong resistance zone that has formed and the price which is moving higher has reached this zone, respected it and is bouncing lower from this zone. Also, we have a bearish divergence that has formed between the first high that has formed at 1.26097 and the second high that has formed at 1.26845 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 evidence of bearish pressure. So everything looks good here for the bears and we may now move down to one more timeframe lower and look for evidences supporting this bearish view.
GBPCHF H1(1 Hour) Chart Analysis – Multiple False Breaks, Bearish Convergence, ADX Indicator
On the H1 chart, the price which is moving higher has created multiple false breaks and also we have a bearish divergence between the first high that has formed at 1.26818 and the second high that has formed at 1.26845 based on the MACD indicator. The price then moved lower and broke below the last low at 1.26387 thus forming a classical setup of bearish divergence followed by bearish convergence, we may consider these as evidences of bearish pressure. In addition to this, the ADX indicator gave a bearish signal here as well 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 based on all this, my short term view remains bearish here and I expect the price to move lower further until the H4 resistance zone holds.
Technical Analysis & Forecast Summary
GBPCHF D1(Daily) Chart Analysis
- Bearish Channel, Stochastic Oscillator
GBPCHF H4(4 Hours) Chart Analysis
- Strong Resistance Zone, Bearish Divergence, ADX Indicator
GBPCHF H1(1 Hour) Chart Analysis
- Multiple False Breaks, Bearish Convergence, ADX Indicator
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.
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Happy Trading!
Yordan Kuzmanov
Chief Trader at the Traders Academy Club
