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From Monday’s commentary, USDCAD and GBPCAD both gave us favorable setups over the last 24 hours, breaking above wedge resistance on the 4 hour and now daily time frames.
Because I’m covering two GBP pairs today, I do want to mention that we have the BoE report on Thursday which is sure to produce increased volatility in all GBP pairs, so be sure to take that into consideration when planning your trades.
GBPCAD appears to have quite a bit of potential, especially when taking into consideration the broader outlook, but more on that in a moment.
The past 24 hours gave us a bullish breakout of the well-defined wedge pattern that had developed on the 4 hour chart. This break came as CAD weakened throughout the day.
The pair is currently holding the levels where the day closed, however I’d like to see a pullback to get a more favorable entry. One area I’m keeping an eye on is 1.9114, which is represented by the highs from February 4th to February 9th.
There is of course a possibility that we won’t get a pullback to support before the next leg up. If that happens we can wait for a daily close above 1.9273 and then watch for bullish price action on a retest.
A look at the weekly chart shows a recent consolidation area in the form of a bull flag. This pattern lasted for about a year, which means the breakout is likely to last for quite some time and produce significant buying interest (hasn’t disappointed yet).
If we treat the pattern as a bull flag, a long-term measured objective comes in right around 2.10.
GBPCAD weekly chart:
Summary: Wait for a pullback to support at 1.9114 and then watch for bullish price action. Alternatively, wait for a daily close above 1.9273 and then watch for a retest as new support.
GBPNZD analysis
USDCAD analysis
