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I had my one good eye on this GBP/CAD long-term reversal setup earlier this week, and I think I’m seeing bullish confirmation now.

Long GBP/CAD Idea

Because I was determined not to miss another GBP/CAD rally again, I hopped in at market when I saw the neckline break on my watch list chart.

There has been some confirmation from fundamentals, too, as Brexit negotiator Barnier suggested that a deal would be ready by next week while the Loonie has been reeling from weaker oil prices, risk aversion and BOC rate hike doubts.

GBP/CAD 4-hour Forex Chart
GBP/CAD 4-hour Forex Chart

I placed a wide stop on this one in order to give me enough leeway to cut losses in case price falls back below the neckline on yet another Brexit update or maybe a surge in oil prices. I’m hoping to be able to roll this higher in order to reduce my exposure and possibly lock in some gains on bullish momentum.

As for my target, I’m seeing a lot of potential upside for this pair as its long-term rising channel remains intact and price could be on its way back to the top. Before that, though, I plan on booking some profits right around the mid-channel area of interest.

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

The double bottom is around 600 pips in height, which would place my first target around the 1.7800 levels. If all goes well with Brexit negotiations, I’m open to adjusting this higher and setting my sights on the channel resistance while trailing my stop.

Of course a lot could still happen leading up to the October/early November “deadline” for a Brexit deal, and lower odds of an agreement being reached could still derail this pair’s climb. But while I’ll be keeping close tabs on headlines, I’ll try my best not to be too reactive to short-term noise and gauge how the updates affect the longer-term outlook instead.

What do you guys think of this swing play?

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