What better way to start this week’s Chart Art series than to look at daily and weekly time frames? Check out what I spotted on GBP/USD and GBP/CAD!
Cable is having trouble breaking above the 1.2300 major psychological area, which isn’t surprising since it lines up with a broken channel support from a while back. Not only that, but it’s also around a 50% Fibonacci retracement on the daily time frame!
Are we seeing a break-and-retest play in the making? Shorting at the earliest signs of bearish momentum would give you tons of pips especially if the pound ends up making new 2019 lows against the dollar.
If you think that pound bulls will push the currency higher before it cedes control to the bears, then you might want to wait for a clean break above 1.2300 before you pull the trigger on your shorts.
Whichever bias you end up trading, make sure you practice good risk management like the consistent profitable traders you want to be, aight?
A couple of weeks ago we talked about GBP/CAD’s potential long-term range support.
Well, it looks like some y’all paid attention! The pair is now about 300 pips from the 1.5900 handle and it doesn’t look like it’s ready to lose momentum just yet.
With stochastic still chillin’ like a villain in the oversold territory, you can bet your pips that a lot of bulls are still thinking of jumping in.
Will you? Buying at current levels will still give you a good reward-to-risk ratio especially if you aim for the channel resistance near 1.7800.
If you’re not convinced that the pound is ready to jump that high just yet, then you could also enter at market and exit your trades at the earliest signs of bearish momentum on the shorter time frames.
Just make sure to use wide stops when trading currency crosses like this! They tend to see higher volatility than the majors and you sure don’t want to be kicked out of a trade just because of a spike or two!