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Don’t look now, but I’m seeing huge reversal formations on the longer-term charts of GBP/CAD and USD/CAD. Gonna keep my eyes peeled for neckline breaks!

USD/CAD: Daily

USD/CAD Daily Forex Chart
USD/CAD Daily Forex Chart

I know it ain’t perfect, but that does look like a double bottom reversal pattern right there! Price has a ways to go before hitting the neckline close to the 1.3000 handle, but the narrowing gap between the moving averages suggests that buyers are about to step on the gas soon.

However, stochastic looks ready to head south from the overbought region, which means that bearish pressure could kick in soon. Apart from that, the 100 SMA is currently holding as dynamic resistance while the longer-term 200 SMA could act as an upside barrier as well.

Still, clearing those roadblocks plus the neckline could put USD/CAD on track for around 800 more pips in gains, which is roughly the same height as the chart pattern.

GBP/CAD: Daily

GBP/CAD Daily Forex Chart
GBP/CAD Daily Forex Chart

 

Now this one’s looking a bit more sketchy, but price is much closer to the neckline and could be due for a break soon!

The 100 SMA has crossed above the longer-term 200 SMA on this pair’s daily time frame to signal that pound bulls are ready to charge. In that case, a move past the neckline around 1.7600 could take GBP/CAD up for a 800-pip climb or the same height as the double bottom formation.

Stochastic is on the move down but is closing in on oversold levels, and turning back up could draw even more buyers to the party. If trading breakouts ain’t your thang, you could wait for an actual neckline break then hop in on a retest instead.

Good luck and good trading!

Forex Chart Settings:

Slow Stochastic: 14,3,3
100 SMA: Blue line
200 SMA: Red line4