GBPCAD | Perspective for the new weekPrice action has been a little choppy since it broke below key level @ C$1.70500 and the inability of sellers to break below C$1.68000 in the last 48days gives credibility to the Demand zone indicated on the chart. Current market momentum signals are in alignment with a reversal setup in the short term for the Pound in the coming week with eyes focused on a possible break above the Key level.
Tendency: Uptrend (Bullish)
Structure: Breakout | Supply & Demand | Trendline | Reversal pattern (Double Bottom)
Observation: i. Since the beginning of September 2021, the Pound recorded a 5.19% decline to find a bottom at C$1.67000 area in the last two weeks which is evident on the chart with two consecutive testing of this area.
ii. This is easily identified by drawing a line over pivot highs hereby revealing the prevailing direction and speed of price in the last two and half months.
iii. It is important we take into consideration that since price test C$1.67000 level, price continued to find higher lows which culminated in a Breakout of Bearish Trendline and Key level (Neckline) during last week trading session.
iv. The appearance of a Double Bottom within a zone that has established Demanding power as far back as December 2013 (see weekly and monthly chart) could be a significant clue to go Long in the coming week(s):
v. Technically, the formation of a Double bottom pattern after a major/minor downtrend is regarded as a set-up that describes a change in trend and a momentum reversal from prior leading price action.
vi. Breakout of the Neckline @ C$1.70500 confirms completion of a reversal set-up that signals the beginning of a potential uptrend.
vii. This been said, above key level remains a comfortable area to get involved in a Long position in the coming week... Trade consciously!😊
Trading plan: BUY confirmation with a minimum potential profit of 400 pips.
Risk/Reward : 1:4
Potential Duration: 10 to 20days
NB: This speculation might be considered to make individual decisions on the lower timeframe.
Watch this space for updates as price action is been monitored.
Risk Disclaimer:
Margin trading in the foreign exchange market (including commodity trading, CFDs, stocks etc.) has a high risk and is not suitable for all investors. The content of this speculation (including all data) is organized and published by me for the sole purpose of education and assistance in making independent investment decisions. All information herein is for your reference only and I take no responsibility.
You are hereby advised to carefully consider your investment experience, financial situation, investment objective, risk tolerance level, and consult your independent financial adviser as to the suitability of your situation prior to making any investment.
I do not guarantee its accuracy and is not liable for any loss or damage which may result directly or indirectly from such content or the receipt of any instruction or notification therewith.
Past performance is not necessarily indicative of future results.
