The GBP/CAD currency pair has no clear trend while looking at the Weekly chart. On the Weekly range, price recently could have tested the bottom, which could have initiated yet another upswing.
Disclaimer: The analysis presented in this article is for educational purposes only and should not be considered as financial advice.
This analysis was done on MetaTrader 4.
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Trade Idea Details:
GBP/CAD symbol
Type: Bullish
Key support levels: 1.6960, 1.6845
Key resistance levels: 1.7200, 17815
Price Action:
By looking at the long term price action, specifically on the GBP/CAD weekly chart, we can see that there is a range-trading in place. Price is stuck between the 76.4% Fibonacci resistance and 38.2% Fibonacci support levels. Besides, the most recent price action shows, that the 38.2% Fibs at 1.6843 was rejected cleanly, suggesting a strong buying domination.
At the same time, GBP/CAD has rejected the 200 Simple Moving Averages, which is yet another confirmation of an ongoing uptrend. This might result in the GBP/CAD exchange rate starting to increase. The strongest resistance is obviously the 1.7815 area, based on Fib retracement level. This means, that as long as the support level holds, there are nearly 700 pips upside potential.
Potential Trade Idea:
This is a long term trade idea, and as long as weekly closing price remains above the 1.6965 level, GBP/CAD should be expected to rise. The ideal entry point would be near the 200 EMA, which is 1.7000 psychological level. Nevertheless, price might not retrace that low and continue moving towards the top of the range. The stop loss could be placed near 1.6780 in order to meet the 1:2 risk/reward ration. But anything below 1.6780 would only increase the RR and will make the trade less risky. Take Profit could be placed near 1.7815
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