Hi Traders! GBPCHF forecast and technical analysis is here. The way I would like to analyze the chart for setups is based on multi-timeframe analysis 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 H4 chart here.
On the H4 chart, the price which was moving lower created a bullish divergence that has formed between the first low that has formed at 1.19849 and the second low that has formed at 1.19720 based on the MACD indicator. The price then moved higher and broke above the last high at 1.21385 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. Also, based on the Heikin Ashi candles we can see that currently, we have strong bullish bodies in upward moving market conditions so it basically reflects a bullish environment. So everything looks good here for the bulls and we may now move down to lower timeframe and look for evidences supporting this bullish view.
On the H1 chart, the price which is moving higher has created a bullish trend pattern in the form of three higher highs, higher lows, we may consider this as evidence of bullish pressure. Generally, after a bullish trend pattern, we may expect corrections and then potential continuation higher. Currently, it looks like a correction is happening, also we had two strong resistance zones that has formed and the price which was moving higher has broken above these zones and is holding above them. After the breakout these strong resistance zones are acting as two strong support zones for us. Until both these strong support zones shown in the image below (marked in green) holds my view remains bullish here and I expect the price to move higher further.
It is always recommended to look for confirmations before you jump into any trade. If you are not sure about how to trade this buy setup then you can use any setup and strategy that you have in your arsenal to look for bullish moves and join this buy trade.
Also, don’t forget to protect your buy trade using a stop loss and make sure to set a target and keep a proper risk/reward ratio.
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Arvinth Akash
Traders Academy Club Team
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