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Important: This site uses New York Close Forex Charts so that each 24-hour session starts and ends at 5 pm EST. These charts are essential for trading price action.
I wrote about GBPCAD on June 4th and again on the 7th.
The idea both times was simple. The pair had carved a massive ascending channel and was resting just above its key support level.
However, the lower high in May combined with the heavy price action above 170.00 meant I was not interested in buying.
Even the title of the June 4th commentary included the words, “breakdown imminent”.
On that same day (June 4th), GBPCAD closed below channel support.
And by the 5th, the pair was below the 1.6980 horizontal level. This is the area I told members I wanted to short from, and I did.
The next two sessions saw GBPCAD lose more than 200 pips from high to low.
But since the June 10th low, buyers have managed to claw back 170 pips as of this week’s high.
So where does that leave us for next week?
I like to keep things simple. In the case of GBPCAD, as long as the pair remains below 1.6980 on a daily closing basis, I will stay short.
Even if buyers take back 1.6980, my bearish bias for GBPCAD will be in play as long as the pair is below former channel support near 1.7050.
Key support is the same at 1.6600. That’s the 2018 low as well as the triple bottom that triggered the bounce late last year.
Now, if I see the pair challenge this week’s high at 1.6962 next week, I will exit my position. I’m not willing to take a loss here, and I can always get back in if warranted.
My bearish bias is also still intact for NZDCAD, although we could see some strength early next week now that the first target has been reached.
Justin Bennett is an internationally recognized Forex trader with 10+ years of experience. He's been interviewed by Stocks & Commodities Magazine as a featured trader for the month and is mentioned weekly by Forex Factory next to publications from CNN and Bloomberg. Justin created Daily Price Action in 2014 and has since grown the monthly readership to over 100,000 Forex traders and has personally mentored more than 3,000 students.Read more...
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