It’s all about the pound on today’s canvas, as we play around with trend and triangle setups on EUR/GBP and GBP/CAD. Get ’em while they’re hot!
EUR/GBP is flirting with the .8475 levels, which is right smack at a 50% Fib retracement, trend line resistance, and previous support on the 1-hour time frame. What’s more, the area is also near the 200 SMA!
Think euro bears are about ready to jump in? Shorting at the earliest signs of bearish pressure would make for a good trade if EUR/GBP drops back down to its .8400 previous lows.
If you think that EUR/GBP will go back to its .8575 range resistance levels, however, then you should at least wait until the pair low key trades above the trend line that we’ve marked. That still has the makings of a good reward-to-risk ratio, amirite?
Here’s one for the pattern geeks out there! GBP/CAD is chillin’ like a villain around 1.7165, which marks the support of a “descending triangle” on the 1-hour chart.
Oh, keep in mind that not all descending triangles see downside breaks. That’s too boring!
You can use the pattern as a basis for profit targets, however. See, triangles tend to see breakouts as strong as the height of the “base” of the triangle. That’s around 35 pips in this case!
What do you think? Is GBP/CAD ready to pop lower? Or will it test its trend line resistance one more time before we see a breakout?