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.
Yesterday I wrote about a potential selling opportunity on EURCAD following a daily close below 1.4950.
It’s no coincidence that the pair is bouncing today after closing above 1.4950 yesterday.
Another Canadian dollar cross that could set up for us over the coming sessions is GBPCAD.
Just like EURCAD, the GBPCAD is resting on a critical support level.
Here’s how things look from the weekly time frame:
Notice the massive ascending channel following the decline that commenced in late 2015.
That makes this a continuation pattern. At least that’s how I’m approaching it.
Also note how GBPCAD has struggled to rebound from channel support since testing it late last year.
That’s a sign of weakness that hints at an imminent breakdown.
Again, it’s similar to EURCAD carving lower highs into support.
But this is not a sell just yet.
Until bears can close GBPCAD below channel support, the market is still bullish and prone to bounces.
That level could be as long as 1.6930 depending on how you draw the channel.
So as you can see, GBPCAD is holding well above that 1.6930 area as of this writing.
In fact, today’s session may even close as a bullish pin bar in which case we could see GBPCAD strengthen back toward the 1.7300 region.
Alternatively, a daily close below 1.6930 would first target those 2018 lows at the 1.6600 handle.
In summary, the bigger picture for GBPCAD looks quite bearish, but the pair remains bullish in the short-term while above 1.6930 on a daily closing basis.
As things stand, I’m partial to shorting a break below support.
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