Daily Price Action
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GBPCAD Down 500 Pips; Another 1,000 to Go?

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Important: I use New York close charts so that each 24-hour period closes at 5 pm EST.

Click here to get access to the same charts I use.

At yesterday’s low, the GBPCAD was down 600 pips since breaking below neckline support on July 26th. I discussed the head and shoulders pattern several times including July 18th and again on the 25th, just one day before the breakdown.

And as a testament to the significance of pin bars, the entire right shoulder began with the formation of a bearish pin bar on June 22nd. Over the next few weeks, the pair would stair-step its way down to neckline support at 1.7180.

Since confirming the reversal pattern last month, the GBPCAD has broken two key levels. The first was 1.7060 and the second 1.6820 which were both discussed in the July 25th commentary.

Yesterday’s session bounced from yet another key level at 1.6600. If you glance back to the price action between September and November of last year, you’ll see why this area is significant.

While you’re viewing that period from last year, you will also notice another critical level at 1.6340. That will be the next area to keep an eye on once sellers can clear 1.6600 on a daily closing basis (using a New York close chart).

For now, the pair is range bound between 1.6600 support and 1.6820 resistance. A daily close above 1.6820 would expose the 1.7060 resistance area, while a close below 1.6600 would pave the way for a move to 1.6340.

It’s that simple at the moment. Keep in mind, however, that the GBPCAD is relatively overextended on the daily and especially the weekly time frame. In fact, on the latter, it’s more than 400 pips below the weekly 10 and 20 EMAs.

With that in mind, I wouldn’t be surprised to see some additional consolidation before the next leg lower. Some sideways movement here would be a welcome sight for shorts as it would help weed out any weak hands and attract a fresh round of offers.

The measured objective for the 1,500 pip head and shoulders remains the 2016 low near 1.5700. So although the pair is currently down 500 pips from the neckline, it seems it’s only a third of the way along its 1,500 pip journey that began at 1.7180.

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GBPCAD daily time frame

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17 comments
Emuobo Agbahovbe says

Thanks. I had a question on pyramid trading but I found the post on it. Your materials are always so helpful.

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    Justin Bennett says

    Glad you found what you were looking for.

    Reply
Grace says

AS alwaya thanks for the analysis. Though i dont trade gbpcad, but you are my torchlight. I rase cap for you my boss. Hope to become memeber very soon

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    Justin Bennett says

    You’re welcome. Hope to see you on the inside soon.

    Reply
Sihle says

thank you.

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    Justin Bennett says

    You’re welcome.

    Reply
Idogei Emmanuel says

Thank you Sir Justin. I am a better trader with your guidance.

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    Justin Bennett says

    My pleasure. Pleased to hear that.

    Reply
vincent onyeomav says

I never regard your post in my box- until i began to copy your -trade/setups. thanks. I am now 30% better in my demo accounts– God bless you.

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    Justin Bennett says

    Cheers.

    Reply
Godwin says

Thanks for being there always. Your approach to forex gives the newbies hope for a better tomorrow. YOU are GOD sent.

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    Justin Bennett says

    You’re welcome, Godwin. Good to know it’s helping.

    Reply
guest says

“…the pair would stair-step its way down to neckline support at 1.7180.” but now the price is already at 1.6728x..

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    Justin Bennett says

    Right, that was written in past tense. I was referring to what happened prior to breaking below the neckline.

    Reply
Quang Trung says

Justin cho mình hỏi con usd/chf hình thành mô hình lá cờ rồi vậy đã có mục tiêu cụ thể chưa?

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derrick says

that was so perfect

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steven says

Hi Justin , i have been watching your analysis,,Dude, you have tempted me to join your services …

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