Hi Traders! In today’s technical analysis post I am sharing with you the GBPJPY short term sell idea based on muti-timeframe analysis method. This pair definitely looks interesting at the moment so as usual we will start our analysis from the highest timeframe which would be the daily chart here. The platform in which we are going to perform this analysis is on the MetaTrader4(MT4). You can find some useful tips and hacks about the MT4 platform here. Lets start our analysis.
- 1 GBPJPY D1(Daily) Chart Analysis – Bullish Trend Pattern, Bearish Divergence, Parabolic Sar
- 2 GBPJPY H4 (4 Hours) Chart Analysis – Bearish Trend Pattern, RSI Uptrend Line Breakout
- 3 GBPJPY H1 (1 Hour) Chart Analysis – Looking For Lower Highs, Lower Lows Pattern
- 4 Technical Analysis & Forecast Summary
GBPJPY D1(Daily) Chart Analysis – Bullish Trend Pattern, Bearish Divergence, Parabolic Sar
On the daily chart we have a bullish trend pattern that has formed based on the price action and currently it looks like this pattern has completed itself. So as per the book we may now look for pullbacks to happen and currently it looks like the pullback that we are looking for is happening. In addition to this we also have bearish evidences in the form of a bearish divergence which has formed between the first high on 17th October 2019 and the second high at 12th December 2019 based on the MACD indicator and also the dots are above the price based on the Parabolic Sar. We may now look for more evidences of bearish pressure on lower timeframes to see if they support this bearish view in the short term.
GBPJPY H4 (4 Hours) Chart Analysis – Bearish Trend Pattern, RSI Uptrend Line Breakout
On the daily chart the price which was moving lower had created a price action based bearish trend pattern. Generally we may now expect corrections to happen after this and possible continuation lower. Currently it looks like the correction that we were looking for is happening in the form of some sort of a range pattern. So as of now everything looks good here for the bears as we have a perfect bearish trend pattern followed by a flat correction in the form of a range, if the price moves lower and breaks below the bottom of this range we may then consider it as an evidence of bearish pressure. In addition to this we also have a breakout of the most recent uptrend line on the RSI indicator which we may consider as an evidence of bearish pressure. Lets move to one timeframe lower now, which is our current trading timeframe H1 chart.
GBPJPY H1 (1 Hour) Chart Analysis – Looking For Lower Highs, Lower Lows Pattern
On the H1 we had a first leg down and currently it looks like a pullback is happening. If the price moves lower and breaks below the current low at 142.334 creating lower lows, lower highs pattern thus verifying the bearish pressure again, we may then look to sell the rallies with more bearish evidences.
Technical Analysis & Forecast Summary
Lets recap and summarize the analysis we had so far:
GBPJPY D1(Daily) Chart Analysis:
- Bullish Trend Pattern, Bearish Divergence, Parabolic Sar
GBPJPY H4 (4 Hours) Chart Analysis:
- Bearish Trend Pattern, RSI Uptrend Line Breakout
GBPJPY H1 (1 Hour) Chart Analysis:
- Looking For Lower Highs, Lower Lows Pattern
It is always recommended to look for confirmations before you jump into any trade. If you are not sure about how to trade this 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.
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