Is that a complex double bottom I’m seeing on the 4-hour chart of GBP/CAD?
Take a look at this potential bounce off a major support area!
GBP/CAD 4-hour Forex Chart by TradingView
After a dovish BOE surprise that dragged this sterling pair to the long-term floor around the 1.8350 minor psychological mark earlier this month, GBP/CAD is suggesting that it may be done with its decline.
At the same time, upbeat Canadian CPI data appears to have dampened further BOC easing expectations, keeping the Loonie supported.
Can the pair head north from here?
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your homework on the U.S. dollar and the Swiss franc, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
The pair is forming what appears to be a double bottom pattern around 1.8400 and is currently testing the neckline close to R1 (1.8480) and the 1.8500 major psychological mark. A break above this resistance could pave the way for more gains up to R2 (1.8550) then R3 (1.8610), although the moving averages are showing a bearish crossover.
Should pound bears keep flexing their muscles, look out for another potential dip back to the support area at S1 (1.8340) and an extended period of consolidation for the pair.
Just keep an eye out for a possible break lower that could spur a test of S2 (1.8280) and a longer-term slide for GBP/CAD.
Whichever bias you end up trading, don’t forget to practice proper risk management and stay aware of top-tier catalysts that could influence overall market sentiment!
Disclaimer:
Please be aware that the technical analysis content provided herein is for informational and educational purposes only. It should not be construed as trading advice or a suggestion of any specific directional bias. Technical analysis is just one aspect of a comprehensive trading strategy. The technical setups discussed are intended to highlight potential areas of interest that other traders may be observing. Ultimately, all trading decisions, risk management strategies, and their resulting outcomes are the sole responsibility of each individual trader. Please trade responsibly.