Checking out the range on GBP/CAD ahead of a busy economic calendar for both the U.K. and Canada this week.
GBP/CAD Range Play
On the one hour chart above, we’ve got GBP/CAD moving sideways for the past month, with refreshed Brexit drama likely limiting a bullish Sterling breakout, and Coronavirus fears negating some better-than-expected economic data from Canada this month. We’ve got a busy calendar ahead for both currencies, most notably the latest CPI update for Canada and employment data from the U.K., so it’s likely the action will pick up very soon for this pair.
Given that the latest employment data from Canada was positive (likely holding off rate cut speculation) and disagreements between the U.K. and EU seem to be coming often on Brexit, I’m leaning bearish on this pair for now. And with that bias, I’m going to set orders for a short position if the pair bounce higher from current trading levels around 1.7200. My stop will be based on the daily ATR of around 120 pips, and my max target is set for the February low. Here’s what I’m doing:
Short half position GBP/CAD at 1.7250, max stop at 1.7360 with 0.50% risk, max target at 1.7130
I’m only risking 0.50% of my account on this trade and I’ve got max potential return-on-risk of around 1.10:1. If my trade is not triggered before the end of the week, I’ll be sure to close down the orders.
What do you guys think? Are you watching GBP/CAD for a range reversal setup? Let me know in the comments section below!
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