GBP/CAD Uptrend to Resume at 1.6167?

Last updated 9/1/2010 2:38 PM EST (GMT -5) 0 Comments - Add your comment

FX360 Technical Analyst Staff

Technical Analyst, GFT

A bullish Gartley pattern on the GBP/CAD 2hr chart may present an opportunity to buy the pair if prices drop to entry at 1.6167 in the coming days. This entry level is defined by the following levels of Fibonacci and pattern support:

The stop is placed at 1.6059, just beyond the next level of converging support (characterized by the 78.6% XA retracement and 161.8% ABCD pattern completion). The target is set at 1.6311, just below the 61.8% retracement of the projected CD leg, with the stop moved to breakeven if prices rise to 1.6246 after entry. Conservative traders may even consider taking full profits at the 1.6246 level due to last weekend’s bearish gap. Prices must remain below 1.6420 for this trade idea to remain valid. Finally, traders should remain wary of the effect of event risk in the form of tomorrow morning’s Housing Price Index reports and Friday’s Services PMI Report out of the U.K.

Potential Strategy: Buy GBP/CAD at 1.6167, risking 1.6059 and targeting 1.6311. Move stops to breakeven at 1.6246.

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