No more hesitating! I jumped in at market when I saw this pair gaining more traction after its move past the double bottom neckline. Here are my entry and exit levels.
Long GBP/CAD Trade
This pair already busted through the pattern’s neckline last week, but I decided to wait for a bit of a retest before hopping in. Just wanted to make sure that the break wasn’t a fake out!
I was able to get in at 1.8075 and I set a wide stop below the neckline and 1.7700 handle. The formation is roughly 2,000 pips tall and I’d actually like to aim for that amount, but I’ve set a conservative profit target just below the 1.9000 major psychological mark and mid-2016 highs.
I’ve got good reason to maintain a bearish bias on the Loonie because the currency seems to be shrugging off crude oil gains and has been extra sensitive to trade war jitters. After all, NAFTA negotiations are still ongoing and things could turn sour with Trump’s decision to put more protectionist folks in office.
Besides, BOC Governor Poloz hinted in his speech that the central bank could sit on its hands for a while and take a break from hiking rates.
In contrast, sterling has been one of the more resilient currencies lately as bulls seem confident that the U.K. economy could make Brexit conditions more favorable. Data has also been mostly upbeat and the BOE could maintain its tightening stance as inflation continues to advance.
With these current setup, I’m looking at a potential 2.25-to-1 R:R at 0.5% of my account on the line. Care to share your thoughts on this play?
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