- GBP/CAD bulls looking for the right-hand shoulder to be completed.
- Prospects are only bullish once the newly formed resistance structure is broken.
GBP/CAD is on the verge of a bullish extension, but there is still some work to be done by the bulls as newly formed resistance structure puts a speed bump in the road.
However, the new downside structure formed in the last few trading sessions offer the bulls an opportunity should the over dead structure give way.
The following is an analysis of the weekly and daily chart accompanied by an illustration on a lower time frame to reveal where the next swing trading opportunity could emerge in a high probability setup.
As can be seen, the price is holding in a bullish territory with prospects of an extension into a deeper resistance with the supply zone.
Meanwhile, the price has dropped to a familiar support that has a confluence of the weekly 50% mean reversion and daily 61.8% Fibonacci retracement level of the latest bullish impulse.
In more recent price action, the correction of the latest bullish impulse has met a 38.2% retracement where the price would be expected to stablise around.
In doing so, its worth noting that the price is also laying out the foundations for a bullish head and shoulders, so if it does indeed stabilise here, the right-hand shoulder would be a highly bullish conviction.
The last price action has carved out some downside structure to a 61.8% Fibo which is exactly what the bulls were waiting for in order to enable a long to be taken protected by bullish structure.
However, in doing so, there is also a bearish structure that has been recently formed and bulls will want to see roof taken off before looking for an optimal entry point protected by a stop-loss below newly formed bullish structure.
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