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GBPUSD H4(4 Hours) Chart Analysis – Strong Resistance Zones, Bearish Hidden Divergence, Stochastic Oscillator
On the H4 chart, we have two strong support zones that has formed and the price which is moving lower has broken below these zones and is holding below them, we may consider this as evidence of bearish pressure. Currently, these strong support zones are acting as strong resistance zones for us. Right now, it looks like a correction is happening. We also have a bearish hidden divergence that has formed between the first high that has formed at 1.41321 and the second high that has formed at 1.39869 based on the MACD indicator which we may consider as another evidence of bearish pressure. Also, based on the Stochastic Oscillator we could see that the price has reached its extreme which we may consider as yet another evidence of bearish pressure. We may now move down to lower timeframe and look for evidences supporting this bearish view.
GBPUSD H1(1 Hour) Chart Analysis – Multiple False Breaks, Multiple Bearish Divergences, Two Key Resistance Zones
On the H1 chart, the price has created multiple false breaks and bearish divergences between the first high that has formed at 1.39362 and the second high that has formed at 1.39869 which we may consider as evidences of bearish pressure. Also, while measuring the first wave of this correction using the Fibonacci expansion tool, we could see that the 100%(1.40138) Fibonacci expansion level of this first wave coincides with the first resistance zone on the H4 chart which makes this a key resistance zone for us. Also, we could see that the 161.8%(1.41089) Fibonacci expansion level of this first wave and the downtrend line coincides with the second resistance zone on the H4 chart which makes this area a second key resistance zone for us. Until both these key resistance zones hold my view remains bearish here and I expect the price to move lower further.
Technical Analysis & Forecast Summary
GBPUSD H4(4 Hours) Chart Analysis
- Strong Resistance Zones, Bearish Hidden Divergence, Stochastic Oscillator
GBPUSD H1(1 Hour) Chart Analysis
- Multiple False Breaks, Multiple Bearish Divergences, Two Key Resistance Zones
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 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.
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To your success,
Vladimir Ribakov
Certified Financial Technician
