Daily Price Action
Shares

GBPCAD Broadening Wedge Points to Lower Prices Next Week

Shares

Yesterday I wrote about a short opportunity on EURCAD.

The false break that occurred above resistance signaled weakness.

If you saw that post on EURCAD, you know that the resistance area was between 1.4600 and 1.4630.

Friday’s session hit a high of 1.4613 before dropping 60 pips.

Now it seems the pair’s counterpart, GBPCAD, is carving a bearish pattern of its own, this time in the form of a broadening wedge.

Because it’s a rising broadening wedge, it has bearish implications.

Furthermore, as you can see from the chart below, last Friday’s rally may have put in the first lower high since last August.

Notice how GBPCAD has been carving higher highs and higher lows since the rally began in August of last year.

The broadening wedge combined with what could be the first lower high points to the likelihood of further losses next week.

But keep in mind that GBPCAD hasn’t confirmed the breakout yet.

As of this writing, the wedge support near 1.7090 is still intact as support.

That support level is very near the 1.7050 horizontal level as well.

When we factor all of this in, it means that GBPCAD sellers need to secure a daily close below 1.7050/90 next week to confirm the breakdown.

Remember that I use New York close Forex charts, so the “daily close” refers to 5 pm EST.

Given this week’s bearish price action, such a break doesn’t seem far away.

A close below 1.7050/90 would expose 1.6830 followed by 1.6600.

Alternatively, a close above the area around 1.7380 would suggest strength and delay the bearish outlook.

Just remember that a lower GBPCAD agrees with what we’ve already seen from the pound (GBPUSD) this week.

I wrote about the potential for a move lower from GBPUSD on February 3rd and again on the 5th.

I also got short at 1.3044 as I pointed out in the member’s area on Wednesday.

The British pound showed no signs of strength into Friday’s close, so I have no reason to believe it won’t continue lower next week.

The Canadian dollar is also holding up relatively well. We saw that first-hand with the EURCAD selloff from 1.4600/30.

So, although the GBPCAD isn’t in reversal territory yet, it doesn’t seem far away given this week’s price action.

Want to watch the GBPCAD video I just released in the member’s area?

Get a Lifetime Membership Today and receive exclusive member-only content including one to two new videos every day. Save 40% in February!

GBPCAD rising broadening wedge on the daily chart

Leave a Comment:

5 comments
Justin Bennett says

Want me to help you become a better Forex trader?

Get a Lifetime Membership to Daily Price Action today and receive access to Justin’s full price action course, dozens of forums with over 3,000 members, daily videos of trade ideas, direct access to Justin, and much more!

Save 40% on a lifetime membership in February!

Reply
    AK says

    Hi Justin,

    I sent you a message via the contact page on your DPA site over a week ago regarding becoming a member. Still awaiting reply!

    I sent you another message via your Telegram personal account that hasn’t been seen yet!

    Please respond here or to either of those, preferably to my email, as I am having a problem with Blueberry in this regard prior to becoming a member.

    Thank you, and keep up the excellent work.

    Reply
      Justin Bennett says

      Sorry to hear that, but I don’t have any outstanding emails from a week ago.

      As for Telegram, I don’t have a personal account. The Telegram account I use for DPA doesn’t allow for subscriber contributions.

      Feel free to reach out again using the contact form. However, if your problem is with Blueberry, as you say, then reaching out to them directly might be best.

      Reply
Thu says

Thanks you so much!

Reply
    Justin Bennett says

    You’re welcome.

    Reply
Add Your Reply