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GBPCAD trade ideas

GBP/CADA double top is a bearish reversal pattern in technical analysis, indicating that an asset's price is likely to fall after reaching a certain level twice in succession, with a moderate decline between the two peaks. This pattern is used by traders to predict a potential change in the prevailing uptrend to a downtrend. Here’s an overview of the double top pattern: Structure of a Double Top 1. **Two Peaks**: The asset's price reaches a high point (resistance level) twice, with a pullback between the peaks. The two highs are roughly equal. 2. **Trough**: The moderate decline between the two peaks forms a trough. 3. **Neckline**: The horizontal support level at the bottom of the trough. This line is critical for confirming the pattern. Identifying a Double Top 1. **Uptrend**: The pattern occurs after a significant uptrend. 2. **First Peak**: The price rises to a high point and then pulls back. 3. **Trough**: The price declines from the first peak to form a trough, establishing a support level (neckline). 4. **Second Peak**: The price rises again to a level similar to the first peak and then declines. 5. **Breakdown**: The pattern is confirmed when the price breaks below the neckline support level after the second peak. Example Assume the price of a stock rises to $100, falls to $90, rises again to $100, and then falls below $90: 1. **First Peak**: $100. 2. **Trough**: $90. 3. **Second Peak**: $100. 4. **Neckline**: $90. 5. **Breakdown**: Price falls below $90, confirming the double top pattern. Trading the Double Top 1. **Entry Point**: Enter a short position when the price breaks below the neckline with increased volume. 2. **Stop-Loss**: Place a stop-loss order above the second peak to manage risk. 3. **Target Price**: The target price is usually estimated by subtracting the height of the pattern (distance from the peaks to the neckline) from the breakdown point. Example Calculation - **Height of the Pattern**: $100 (peak) - $90 (neckline) = $10. - **Breakdown Point**: $90. - **Target Price**: $90 - $10 = $80. Benefits and Risks **Benefits**: - **Clear Signal**: The double top provides a clear signal for a potential trend reversal. - **Defined Risk/Reward**: Traders can set precise entry and exit points, managing risk effectively. **Risks**: - **False Breakdowns**: There is a risk of false breakdowns, where the price breaks the neckline but then reverses back up. - **Market Conditions**: The pattern is more reliable in strong trending markets and less effective in choppy or sideways markets. Conclusion The double top pattern is a useful tool for traders looking to identify potential bearish reversals. By recognizing the formation of the two peaks and the breakdown below the neckline, traders can set up trades with clear entry and exit points. Proper risk management, including the use of stop-loss orders, is essential to mitigate the risk of false signals.
Short
by B9A-88652-NisarAhmad
Possible GBPCAD correctionToday we face news from the UK regarding general retail sales which are expected to be slightly negative versus the previous result, including the annual. Market start sentiment has been relatively negative due to concerns of interest rate hike by the FED. The DAX, CAC40,FTSE100 fell at the open by 0.9%,0.6% and 0.9% respectively. Sentiment for the week's close has been rather gloomy, including the Asian close, which has also been dragged down causing the Nikkei to fall 1%. Yesterday the Dow Jones had its worst session in over a year, falling over 600 points following the US Federal Reserve news. As for the European central bank (ECB), it is expected to start cutting interest rates in June, but the UK has experienced such high inflation that it is causing problems for the Bank of England (BoE). As we said, retail sales have fallen by 2.3% on a monthly basis and the weather has prevented the textile sector from performing normally at this time of year. In the afternoon, Canadian retail sales will be reported and the United States will close the afternoon with data on sales of durable materials, aerospace, defense and transportation products, closing with the expectations of the Michigan FED and consumer sentiment and inflation closing with Baker Hughes reserves data. If we look at the daily chart currently the Sterling vs Loonie cross (GBPCAD), since May 12 it started a bullish breakout, and pierced this Tuesday the highs zone generating currently an attempt to reach highs locating at 1.74379. On the bell aspect we see a monocamp with price control zone (POC) at 1.71630 Canadian dollars per pound sterling. And it has given us a signal on RSI of a possible reversal back to the mean due to it being at 17.13%. We'll see how the news today for a possible sharp correction this week's close. Ion Jauregui - Analista AT ******************************************************************************************* The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and such should be considered a marketing communication. All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acing on the information provided does so at their own risk.
Short
by ActivTrades
GBPCAD - 4hrs ( Buy Trade Target Range 240 PIP ) Pair Name : GBP/CAD 🗨Time Frame : 4hrs Chart / Close ➕Scale Type : Large Scale ------ 🗒 spreading knowledge among us and to clarify the most important points of entry, exit and entry with more than 5 reasons We seek to spread understanding rather than make money ✔️ Key Technical / Direction ( Long ) Type : Mid Term Swing ——————————— Bullish Break 1.72500 Area Reasons - Major Turn level / W - Pattern Break - choch Zone - Fibo Golden - Visible Range Hvn - Day + week high - 3 Quarter + quarter High Bearish Reversal 1.75000 Area Reasons - Major Turn level / M - Year High Area - Fibo 1.27 % - Pattern Target - Ultra High Volume area
Long
by GoldenEngine