The recent break of support for GBPCAD out of the sideways moving range it has been trapped in for the past 6 months could potentially act as resistance if we do get a retracement, before it continues to the downside.
GBPCAD DAILY
The fact that this pair has been range-bound for half a year does suggest this downside break is significant, especially as this range has intersected with a long-term trend line only seen on the weekly charts.
GBPCAD WEEKLY (10 YR TREND)
Could this be the start of a protracted, long-term move on the daily chart? Who knows. However, as technical traders we seek probabilities to support our argument so we have an awareness for what could happen, when...but most importantly, how we can benefit from them.
Of course, nothing in the market is ever guaranteed. But we are waiting for price to do something very specific before we look to trade it.
We are therefore waiting for price to come back to this support level (on the daily) @1.8189, to test it as resistance. This level over-laps neatly with the 0.382 Fibonacci Retracement level.
If price does get to this level is one thing...We will need to and will wait for a price action-based entry signal before entering. This could be a pin bar, doji or double inside bar. If we do not get our entry signal, we will simply more on. Rules for entry are exactly that!
Verdict: One for the watchlist
GBPCAD DAILY
The fact that this pair has been range-bound for half a year does suggest this downside break is significant, especially as this range has intersected with a long-term trend line only seen on the weekly charts.
GBPCAD WEEKLY (10 YR TREND)
Could this be the start of a protracted, long-term move on the daily chart? Who knows. However, as technical traders we seek probabilities to support our argument so we have an awareness for what could happen, when...but most importantly, how we can benefit from them.
Of course, nothing in the market is ever guaranteed. But we are waiting for price to do something very specific before we look to trade it.
We are therefore waiting for price to come back to this support level (on the daily) @1.8189, to test it as resistance. This level over-laps neatly with the 0.382 Fibonacci Retracement level.
If price does get to this level is one thing...We will need to and will wait for a price action-based entry signal before entering. This could be a pin bar, doji or double inside bar. If we do not get our entry signal, we will simply more on. Rules for entry are exactly that!
Verdict: One for the watchlist
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