Chart of the Day GBPCAD
GBPCAD Potential Reversal Zone - Probable Price Path
GBP: The British government implements more restriction measures and is worried about the prospects of the British economic recovery, which may drag the pound sterling. Prime Minister Johnson announced new epidemic prevention guidelines, including employees as far as possible to stay home to work, and bars and restaurants closed at 10 pm. He said that the new pandemic prevention measures have a chance to be implemented for six months. Bank of England Governor Bailey said that the new round of the epidemic has increased the downside risks to the economy, but the central bank is only assessing whether negative interest rates can be implemented for the time being, and does not imply that they will be implemented
CAD: the Canadian calendar for this week is bare of anything noteworthy and today’s Throne Speech by the PM will reportedly not include a reference to fiscal anchors. Newly-minted Finance Minister Freeland will present the government’s spending and income outlook later this year in the government’s fiscal update. It is difficult to see a scenario where markets pay too much attention to today’s Speech as broad USD forces dominate CAD price action. The CAD will continue to trade in line with the dollar done for the rest of the week and possibly until next Wednesday’s Jul (Aug snapshot) GDP print.
From a technical and trading perspective, the GBPCAD is tracking a five wave decline from the August high. The breach of the major trendline support and the subsequent snapback and rejection adds credence to his view, suggesting we have a 4th wave high in place just below 1.72 the bearish reversal candles from this area now warrant bearish exposure targeting an ideal 5th wave low objective at 1.66, just ahead of the March lows, where we may witness a more meaningful double bottom pattern develop. On the day only a closing breach of 1.7150 would concern the 5th wave decline thesis.
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Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.
Past performance is not indicative of future results.
High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% and 75% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
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Patrick has been involved in the financial markets for well over a decade as a self-educated professional trader and money manager. Flitting between the roles of market commentator, analyst and mentor, Patrick has improved the technical skills and psychological stance of literally hundreds of traders – coaching them to become savvy market operators!