This pair is closing in the bottom of its range visible on the DAILY time frame.
I’m counting on a negative read for Canada’s jobs report to spur a big bounce!
This long-term range play seems too good to pass up!
As you can see from the daily chart above, GBP/CAD is within striking distance of the support around 1.6800, which has been holding since last year.Buyers could step in to defend this floor, especially since technical indicators are hinting that a bounce is due.
The 100 SMA is above the 200 SMA to signal that support is more likely to hold than to break while Stochastic is indicating that sellers could use a break.
If support holds, this pair might make its way back up to the resistance or at least until the middle of the range at 1.7300.Of course this could hinge on the outcome of Canada’s jobs report for April, which is expected to show a 160.5K dip in hiring. A larger than expected decline could cast doubts on the economy’s recovery, especially some cities reimposed lockdown restrictions lately.
Pound bulls might be waiting to charge since the BOE just agreed to start tapering asset purchases in this week’s policy statement, with one MPC member even voting to lower the overall purchase target.
Then again, the BOC also decided to taper its weekly purchases recently, so an upside surprise in the jobs report might spur a break below the range.
In any case, I’ll be keeping close tabs on the actual release to gauge which direction this pair might go! Do you plan on trading the Canadian employment report, too?
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