Sup, dawg? Let’s start by checking up on the rectangle setup that we identified back on Monday. If y’all can no longer remember, we wuz looking to go long when the pair was close to the rectangle’s support area at 80.80. And as y’all can plainly see, the support area held, and the pair moved higher. Anyhow, the pair is closing in on the rectangle’s resistance area over at 81.80. So if y’all be plannin’ to trade withing the range, then y’all better start lookin’ for opportunities to go short. Know what I’m sayin? And all the more so, given that stochastic’s already indicating overbought conditions and all that.
Next up, we’ve got us a fresh descending channel for GBP/CAD. Well, it ain’t exactly a descending channel yet, since the pair needs to move back down in order to validate the forex chart pattern. And there’s a good chance that the pair will move down. After all, the pair did get rejected at 1.6180, a price area with very significant market interest, even on the higher time frames.
However, there’s also a good chance that pair may continue moving higher instead. Why? Well, see where price is at, dawg? That’s right! It’s been closing above both moving averages, which is a sign that bullish interest may be strong. Also, them moving averages look like they be ready for a cross-over into uptrend mode sooner or later. If that happens, then that’s also a bullish sign. Moreover, 1.6080 is also a price area with significant market interest, even on the higher time frames. And did I mention that stochastic is already moving up after having reached oversold territory?
Anyhow, it may be prudent to plan for both scenarios. And always make sure to practice proper risk management. By the way, if the pair follows the bullish scenario, then bulls will likely be gunning for 1.6340 and then 1.6500. An upside break past 1.6180 needs to be really strong, though.
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To get the complete picture and avoid getting blindsided by economic data, you also have to do your fundamental analysis. Lucky for us, Pip Diddy fills us in on what we need to know about fundamentals with his Daily Forex Fundamentals.