GBP/CAD Price Analysis: Choppy conditions at counter trendline resistance
|- GBP/CAD is being rejected at monthly resistance which opens the case for the downside.
- Bears can be enthused by the restest at the counter trendline resistance but 4-hour chart price action is dubious.
GBP/CAD has failed to break out of from the reverse head and shoulders on the monthly chart and is rejected at a strong level of supply.
The price is making signs for a breakout to the downside on both the weekly and daily chart but there is less conviction on the lower time frame.
The following chart is a topdown analysis that illustrates the downside bias.
Monthly chart
The price failed to break the resistance once again which is invalidating the reverse head and shoulders.
Weekly chart
The weekly chart shows that there are prospects of a move above the trendline to the prior structure.
Weekly chart 38.2% Fib confluence
However, there are many confluence of the 38.2%, the counter trendline and prior near-term structure.
Daily chart
The daily chart has already offered a number of confirmations that the counter trendline and confluence resistance structure is solid on the restest in what appears to be the formation of wave-3.
4-hour chart reverse head and shoulders risk
The 4-hour chart is, however, seeing the price test back above the 21 moving average.
The risk here is a formation of the reverse head and shoulders and a break to the upside above structure in choppy conditions.
The price action from here should be monitored for a test of the recent lows. A break and restest could offer prospects of a bearish setup with a lower target.
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