GBP/CAD looks tired from its climb and has formed a head and shoulders pattern on its 4-hour time frame.
Are we about to see a reversal soon?
Check out these potential targets!
GBP/CAD: 4-hour
GBP/CAD 4-hour Forex Chart Faster with TradingView
Crude oil seems to be building upside pressure once again on reports of fresh escalation in the Strait of Hormuz, likely keeping global supply concerns in play and the correlated Loonie supported.
Meanwhile, Sterling appears to have run out of steam on its rallies after last week’s BOE decision did little to stoke tightening expectations.
Can these factors trigger a support break on GBP/CAD?
The pair is already testing the neckline of its complex head and shoulders pattern near a major psychological level at S1 (1.8400), with a breakdown possibly dragging it to the next bearish targets at S2 (1.8340) then S3 (1.8270).Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your homework on the British pound and the Canadian dollar, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
The 100 SMA is above the 200 SMA for now, but the gap between the indicators has narrowed enough to hint at a potential bearish crossover. Also, GBP/CAD is trading below both moving averages as an early indicator of sellers taking over.
Should support hold, on the other hand, the pair could make its way back to the nearby resistance zone around the 1.8500 mark and R1 (1.8520). Stronger upside pressure could lift it higher to R2 (1.8580) near the 1.8600 major psychological handle.
Whichever bias you end up trading, don’t forget to practice proper risk management and stay aware of top-tier catalysts that could influence overall market sentiment!
Promoted: Clean Charts Mean Nothing Without Clean Execution.
GBP/CAD is awaiting confirmation on its reversal pattern. But spotting the setup is only half the job; consistently executing it without hesitation is what separates amateurs from pros.
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