GBP/CAD Trap Trade in Progress

GBP/CAD Technical Analysis

  • GBP/CAD trend should continue
  • Yesterday’s candle low broke previous lows
  • Pinbar rejection
  • Trap trade
  • 1.5050 is intraday target

MEGATREND MAs: Bearish

D1 Chart GBP/CAD

  1. Trendline touch
  2. Strong support at Q L4
  3. Trap entry
  4. Intraweek target
  5. Swing target

The GBP/CAD is still bearish. Yesterday’s Bank of Canada decision was to hike 75 bps which was already discounted in price. However, the statement itself was hawkish as the BOC will continue to fight inflation strongly. That is a cue for further rate hikes and a sign of hawkishness.

The first entry I had was closed yesterday with +53 pips profit. Today the price retested the lower MA which called for another short entry as a trap trade. Ideal trap entry was at 1.5141. Keep in mind that yesterday’s candle broke previous lows which is a sign of continuation. The intraday target is 1.5050 ( it’s almost a +100 pips intraday trade potential) with 1.4928 and 1.4676 as swing.

This analysis, and all entry signals and targets are a part of the Megatrend system and a trading course. I am maintaining 1 short trade on the GBP/CAD.

Cheers and safe trading,

Nenad

Mid-Week Technical Outlook: Pound Crosses In Focus

Consumer prices rose 10.1% in July from a year ago after a 9.4% gain in June. This was the highest reading since February 1982 as prices rose for food, housing & utilities and alcoholic beverages among other products/services. Although this red-hot CPI report will reinforce expectations over the BoE aggressively raising interest rates, it will also create more uncertainty over the UK’s economic outlook.

We saw the Pound appreciate against most G10 currencies following the report as BoE rate hike bets jumped.

GBP/USD remains in wide range

The GBPUSD remains in a wide range despite the red-hot inflation figures. Support can be found at 1.2000 and resistance around 1.2155. A solid break under 1.2000 may open the doors towards 1.1900 and lower. Alternatively, a strong breakout above 1.2155 could spark a move towards 1.2250 and 1.2350.

GBP/JPY Set to Push Higher?

It has been a roller coaster ride on the GBPJPY. Prices have been volatile, choppy and all over the place. Prices are back above the 100-day Simple Moving Average and slowing approaching 164.00. A strong move above 164.00 signal an incline towards 166.00. If bears are able to pull the GBPJPY back below 162.00, the next level of interest cant be found at 160.00.

EUR/GBP in Downtrend

The EURGBP remains in a bearish trend as there have been consistently lower lows and lower highs. Prices are trading below the 50,100 and 200-day Simple Moving Average while the MACD trades below zero. Sustained weakness below 0.8440 could encourage a selloff towards 0.8340. A breakout above 0.8440 is likely to encourage bulls to target 0.8500.

GBP/AUD Heading Into Resistance?

Pound bulls seem to be gaining momentum on the GBPAUD with prices pushing towards the 50-day Simple Moving Average. There could be some resistance here as the 100-day SMA resides just above. If these two obstacles can be cleared, prices may test the 1.7650 level and 1.7800, respectively. Should bulls tire and prices sink back below 1.7300, the next key point can be found at 1.7000.

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GBP/CAD Megatrend Pattern Still in Play

GBP/CAD Technical Analysis

  • Megatrend formation
  • Trend is bearish
  • Profits are protected
  • Extension below 1.5922

MEGATREND MAs: Bearish

D1 Chart GBP/CAD

  1. Dark cloud cover variant 2
  2. Swing low
  3. Shooting star
  4. Final target if 1.5922 breaks
  5. Megatrend

The GBP/CAD is in Megatrend formation. All short entries starting from March would have been in profits. At this point we scaled out of profits protecting the remainder at BE+1. The pinbar entry which is learned on Megatrend trading course was the trigger. Look at the chart for a specific zone for the target price. Targets are 1.5922 and 1.5575.

Cheers and safe trading,

Nenad

 

Indices and Pairs with JPY Start a New Week with an Upswing

Indices continue the reversal initiated in the last week.

SP500 broke a crucial horizontal support on the 4150 points.

Nasdaq bounced off of the 50% Fibonacci and is aiming the 38,2%.

DAX escaped from the symmetric triangle pattern and is aiming crucial resistance on the 14850 points.

USDJPY tries to escape from the symmetric triangle as well.

USDCAD continues the drop influenced by the giant Head and Shoulders pattern.

GBPCAD tries to break the lower line of the flag in order to start a new sell signal.

GBPAUD is doing pretty much the same thing but breaking the horizontal support.

AUDCHF comes back inside of the rectangle. A false bearish breakout can be a good buy signal.

GBPJPY tries to end the correction and is putting heavy pressure on resistances.

Traders Edge: Market Briefing for 30.05.22

For a look at all of today’s economic events, check out our economic calendar.

Correction on USD and Indices Accelerates

Major Financial Markets Technical Analysis

SP500 started the new week with a possible double bottom formation and a promising movement to the upside.

Nasdaq is defending the 50% Fibonacci and is also creating a double bottom formation.

The DAX in a better situation with an inverse head and shoulders pattern. We are inches from breaking the neckline and creating a buy signal.

The EURUSD is climbing higher, after the price broke the neckline of the inverted Head and Shoulders pattern and the long-term down trendline (red).

The AUDUSD is in a very similar pattern and is also aiming higher.

The USDCAD dropped after the price created a false bullish breakout.

The GBPCAD joined the EURUSD and AUDUSD in an upward movement triggered by the inverted Head and Shoulders formation.

The GBPAUD tested the lower line of the pennant. The end of the sideways trend is near, and a breakout to the downside is currently on the table.

Traders Edge: Market Briefing Video for 23.05.22

For a look at all of today’s economic events, check out our economic calendar.

Trade Of The Week: Is The Pound In Trouble?

Sterling hijacked our attention last Friday after collapsing like a house of cards!

GBP/USD Daily chart

It has stumbled into the new week under renewed pressure, struggling to nurse deep wounds inflicted by the dismal retail sales and consumer confidence data. Mounting concerns over the cost-of-living crisis dragging the UK economy into a recession continue to hammer the pound, which is currently trading at levels not seen since September 2020.

Disappointing economic data may fuel speculation over the BoE slowing interest rate rises while political noise from Westminster regarding the post-Brexit trade deal is likely to compound the currency’s woes. Since the start of April, sterling has weakened against most G10 currencies, shedding over 3% versus the dollar of writing.

Taking a quick peek at the technicals, prices look heavily bearish on the weekly timeframe with support at 1.2750. A solid breakdown below this point could drag the GBPUSD to levels not seen since mid-2020 around 1.2500.

GBP/USD Weekly chart

More pain on the horizon for sterling?

Since the start of 2022, the pound has weakened against almost every single G10 currency. It’s is down over 6% versus the dollar and more than 5% against the Canadian dollar.

GBP Year to Date

The pound has the potential to weaken further if weak economic data forces the Bank of England to adopt a cautious approach towards rate hikes. In fact, Andrew Bailey, BoE governor recently hinted that the UK interest rates may be increased less aggressively amid recession fears.

Indeed, retail sales fell by an unexpected 1.4% in March as the rising cost of living hit consumer spending. Consumer confidence plunged to its lowest level since the 2008 recession while PMIs decline in April, signalling that the economy is slowing considerably. But with inflation hitting a 30 year high of 7% which is more than triple the target of 2%, the BoE is certainly in a tricky position.

The central bank is widely expected to raise interest rates by 0.25bp in May, with a total of 6 hikes expected by the end of 2022.

However, repeatedly weak economic data and post-Brexit related uncertainty could throw a spanner in the works for BoE hawks – resulting in a weaker pound. This weakness is likely to be intensified by an increasingly aggressive and hawkish U.S Federal Reserve.

The week ahead…

It’s a relatively quiet week on the UK economic calendar. However, this does not mean it will be a quiet week for the British pound.

GBP/USD 1 hour chart

The GBPUSD has already dropped over 100 pips this morning, with weakness being seeing across the board.

GBP/USD 4 hour chart

There is a lot going on with the dollar with key economic data likely to inject the currency with renewed vigour. Over the next few days, US consumer confidence data, Q1 GDP, consumer sentiment and the PCE deflator among other key reports will be published. Should they reinforce market expectations over the Federal Reserve aggressively raising interest rates, the dollar is set to appreciate further – dragging the GBPUSD lower.

GBP/USD bears step into higher gear

The GBPUSD is heavily bearish on the daily timeframe as there have been consistently lower lows and lower highs. Prices are trading well below the 50, 100 and 200-day Simple Moving Average while the MACD trades below zero. Interestingly, the RSI has fallen below 30 which suggests that the GBPUSD could be oversold.

GBP/USD Daily chart

A solid daily close below the 1.2750 support level could see the currency pair sink towards 1.2600 before experiencing a technical bounce. Alternatively, should 1.2750 prove to be reliable support, the GBPUSD could rebound back towards 1.2900 before resuming the downtrend.

GBP/USD Daily chart

On the monthly timeframe, the GBPUSD is respecting a monthly bearish trend. A solid monthly close below 1.2750 could open the doors towards 1.2500 and 1.2300. If bears run out of steam, a move towards 1.3000 and 1.3150, respectively.

GBP/USD Monthly chart

By Lukman Otunuga Senior Research Analyst

Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.

GBP/CAD Downtrend Continues with the Inside Bar Implosion Entry

GBP/CAD Technical Analysis

  • GBP/CAD Continues down
  • The Implosion entry
  • 1.6692 is the first target

H4 Chart GBPCAD

  1. Swing high
  2. Swing low
  3. Top of retracement
  4. Inside bar implosion
  5. Final target

The GBP/CAD is bearish. We can see that the price has formed a nice straddle pattern (respecting and walking the MAs). I expect a downtrend continuation and we can already see the profits from the entry. It is my proprietary Implosion entry which happens at the break of an inside bar after the price has qualified for entry (by my MEGATREND method).

The first target is 1.6692, followed by 1.6598 the final target.

For a look at all of today’s economic events, check out our economic calendar.

Cheers and safe trading,

Nenad

 

GBP/CAD Is Bullish Now as Technical Price Action Shows Longs

GBP/CAD Technical Analysis

  • Bullish SHS on Daily TF
  • Breakout is expected
  • Positional entry has been established
  • M H5/ Q H3 are targets

 

  1. Left shoulder
  2. Head
  3. Right shoulder
  4. Entry
  5. Target

GBP/CAD is turning bullish and we can see that marubozu candlestick has been printed out. If the market remains bullish, we should secure profits around 1.7100 zone as continuation is expected but its a strong resistance. The market has also made a bullish SHS pattern at the bottom and we should see a steady move up. Any move and close above 1.7025 should see the GBP/CAD moving further up. Watch for a potential breakout of the bullish SHS pattern towards the target zone.

For a look at all of today’s economic events, check out our economic calendar.

Cheers and safe trading,

Nenad

 

New Zealand Dollar end The Bearish Correction

The NZDUSD is in a false bearish breakout from the falling wedge pattern. That is possibly a very nice buying opportunity.

The GBPNZD is testing the combination of three important dynamic supports. A breakout can be an amazing sell signal.

The EURJPY broke the upper line of the wedge and is aiming higher with a buy signal.

The GBPCAD is in a giant symmetric triangle on the weekly chart. We will probably have to wait a long time till until the breakout but it will most probably be worth it.

The NZDJPY is in a flag formation. A breakout of its upper line will bring the positive sentiment back.

The GBPJPY is forming a head and shoulders pattern inside of the symmetric triangle pattern. A breakout of the lower line (and the neckline at the same time) can be a good bearish signal and a breakout to the upside can be a signal to go long.

For a look at all of today’s economic events, check out our economic calendar.

Canadian Dollar Reverses the Losses From the Last Week

Global indices continue the reversal. Asian stocks started the week off on the front foot and the rest of the world is about to follow.

SP500 is aiming for new all-time highs. Most probably, buyers will succeed.

DAX is defending the crucial horizontal support on the 15800 points.

Gold ends last week’s correction and breaks the upper line of the flag, aiming north.

The EURUSD is still inside of the wedge pattern with a negative sentiment.

The USDCAD is aiming lower after the bounce from the 38,2% Fibonacci. Sentiment is back to negative.

The GBPCAD is showing us the beauty of the false breakout pattern. The sentiment is bearish.

The EURCAD fails to break the neckline of the iH&S formation.

The CADJPY shows strength by bouncing from the neckline and the 38,2% Fibonacci.

For a look at all of today’s economic events, check out our economic calendar.

GBP/CAD Bearish Move Could Restart

The GBP/CAD is having a retracement. A temporary low close to D L5 camarilla has been formed.

If the market retraces, we should see a move towards 1-2-3 entry at the POC zone which is 1.7282-1.7295. The POC zone should give us a rejection towards lower levels on camarilla. Targets are 0.7230 and 0.7175. However, first we should see a move up then a drop. The market is retracing now as a part of profit taking and this market is generally bearish.

For a look at all of today’s economic events, check out our economic calendar.

Cheers and safe trading,

Nenad

 

GBP/JPY Vs GBP/USD and USD/JPY – March 6th, 2021

GBP/USD last week fell 236 pips from 1.4015 to 1.3776 while overbought GBP/JPY rose 257 pips from 148.14 to 150.71.

Known since the 1930’s, the Japanese pegged GBP/JPY to UK Gold for not only economic viability but the first incursion to the western world of finance. The standard to hold GBP/JPY to the UK held throughout Bretton Woods. Upon the 1972 free float, GBP/JPY became attached permanently with high +90% correlations to GBP/USD.

All JPY cross pairs followed with high and positive correlations as AUD/USD and AUD/JPY, NZD/USD and NZD/JPY, EUR/USD and EUR/JPY while USD/CAD and CAD/JPY became polar opposites as both permanently correlate negatively. USD/CHF and CHF/JPY traditionally also hold opposite correlations.

The Japanese offered not only a double trade but GBP/JPY and GBP/USD as the same exact currency pairs. The same principle holds true for EUR/JPY and EUR/USD, AUD/USD and AUD/JPY and NZD/USD and NZD/JPY. The double trade is permanent for USD/CAD and CAD/JPY.

Why JPY cross pairs remain overbought into week 6 amd not falling with counterpart currencies is the USD/JPY problem to correlations. While GBP/USD correctly correlates to GBP/JPY at +94%, GBP/JPY also not correctly correlates to USD/JPY at +83%. A further problem exists as GBP/USD correlates to USD/JPY at +46 %. All correlations are not only running positive but this situation is the exact same for AUD/JPY, NZD/JPY, EUR/JPY, CAD/JPY and explains why prices remain high and overbought.

Positive correlations are the result of exchange rate prices and relationships to moving averages since correlations are found within the context of averages. USD/JPY trades above vital 105.70,  GBP/USD above 1.3697 and GBP/JPY above 144.80. Correlations are positive because prices trade above respective high / low averages.

Required to assist GBP/JPY to drop is GBP/USD breaks 1.3697 or USD/JPY trades below 105.70. GBP/JPY then decides to fully correlate to USD/JPY or GBP/USD. GBP/JPY in every instant follows GBP/USD as the 91 year correlation and order of currency markets.

Current GBP/JPY trades 1156 pips above GBP/USD and 2506 pips below GBP/CAD. GBP/JPY larger range from GBP/USD becomes 144.08 and 1.5564. GBP/JPY above is located the 14 year average at 155.38 and the 10 year at 148.36.

Prior to the 2016 interest rate changes by the central banks, the market order to currency pair arrangement existed as GBP/USD, GBP/JPY, GBP/CHF then GBP/CAD.

The new order is arranged as GBP/CHF, GBP/USD, GBP/JPY then GBP/CAD and seen as GBP/CHF 1.2855, GBP/USD 1.3820, GBP/JPY 149.86 or 1.4986 then GBP/CAD 1.7292. Much daylight exists for GBP/JPY to trade freely between GBP/USD and GBP/CAD yet 250 pips traded last week from a distance of 1100 and 2500 pips between exchange rates.

Why GBP/CHF and all currency  pairs arranged as Other Currency / CHF dropped from contention as support is due to the uniqueness to the SNB’s interest rate system. Libor is miles from actual interest rates as first comes Saron, Call Money rates and the most vital Debt Register Claims.

JPY cross pairs overall contain downside moves from GBP/JPY at 300 pips and 200 for AUD/JPY and NZD/JPY.

USD/JPY for the week is not only light years overbought but the 5 year average is located at 109.01. A good target is found at 106.65.

GBP/JPY big break lower is located at the 10 year average at 148.38. A break then GBP/JPY trades 146.00’s easily.

GBP/USD this week opens between 1.3768 and 1.3840. Below 1.3768 challenges most vital 1.3697, above 1.3840 then GBP/USD travels much higher.

GBP/CHF and GBP/CAD run good and positive correlations at +93% and +96 % for GBP/CAD. For GBP/NZD and GBP/AUD remain problems as correlations run negative at -43% and -64% for GBP/AUD.

GBP/JPY

Included are GBP/JPY moving averages from 5 day to 253 days. The averages are perfect and derived from the ECB. The first number is the day average followed by trading days then the average.

A 20 day average is actually 15 days, a 50 day average is actually 36 days. Trading day averages to factor perfectly start at the beginning of every year then the numbers increase as days trade. A 50 day average is most stable as it only trades 36 to 50 days.

A 5 day average begins Monday at 2 days, then 3 for Tuesday and Wednesday and 4 for Thursday. A full 5 day average only trades on Fridays.

5 Day     5             149.2391

10 Day  9             149.1325

20 Day  15           148.3808

50 Day  36           145.2691

100 Day               71           142.5398

200 Day               143       139.9417

253 Day               180       139.1231

As GBP/JPY trades lower then the averages drop.

Targets

Targets are not only known miles ahead but targets stack to watch trades unfold.

Current targets: 149.7549, 149.8496, 149.5086, 148.1852, 146.0887, 143.7901, 143.0356.

The ECB and most central banks factor exchange rates to 6 decimal places and 4 for USD/JPY and JPY cross pairs and I follow the ECB exactly.

GBP/CAD Sellers are Waiting in the Ambush

The GBP/CAD is having a retracement. The price is getting close to overbought levels and we could see a drop soon.

As the price progresses towards the 88.6 and the trading zone we could see some momentum on an intraday basis. 1.7605-7625 is the zone where I will be looking to sell, provided that the price slowly grinds towards the POC. Targets are 1.7538 followed by 1.7449 and 1.7405. Only a clear breakout above 1.7655 will make this scenario invalid.

For a look at all of today’s economic events, check out our economic calendar.

Cheers and safe trading,

Nenad

 

Thursday On Indices Brings Us a Correction

Seems that Thursday will be a correction day on global stock exchanges, which is pretty normal and sellers should not get overly excited about seeing a red color on the screens.

FTSE is getting ready for a bearish correction, probably aiming 38,2% Fibonacci.

CAC is doing pretty much the same.

Gold is defending crucial support on 1850 USD/oz.

Oil is testing the most important support in the past few weeks – 41.3 USD/bbl.

AUDUSD aims lower after creating the Head and Shoulders pattern.

EURUSD goes lower after the false breakout of a dynamic resistance.

EURAUD tests and bounces from the lower line of the long-term range.

USDCAD bounces from the long-term horizontal support.

CHFJPY – two safe haven currencies locked inside of the symmetric triangle pattern.

GBPCAD with exactly the same situation.

For a look at all of today’s economic events, check out our economic calendar.

GBP/CAD Might Bounce off W L4 Due to Over-Sold Condition

The GBP/CAD is supported within the POC zone. The price is showing oversold conditions and we might see the bounce.

The pair needs to stay above 1.7200 for buyers to take over. Both GBP and CAD are weak, so the question now is which one is stronger. We could see a move up to the trend line 1.7330 and from there a drop lower. Have in mind that the price is effectively in downtrend so the upmove is actually a counter trend move (retracement). Due to over-sold conditions we should see a bounce up as we also have a confluence of D L3 and W L4.

The Analysis has been done with the CAMMACD.Core

For a look at all of today’s economic events, check out our economic calendar.

 

GBP/CAD Possible Drop Off the W H3

Then GBPCAD has formed a possible rejection pattern off the Camarilla W H3 pivot. We could see a drop.

Overbought conditions along with the change in momentum have made the pair look more bearish. 1.6900 zone could reject the price down to W L3 pivot. W L3 is 1.6820. Only a close above 1.6940 could make the price go higher towards 1.6921 where the trend line is. At this point sellers are slowly regaining control but it’s the NFP Monday so be careful.

The Analysis has been done with the CAMMACD.Core and Sit Systems

For a look at all of today’s economic events, check out our economic calendar.

GBP/CAD Technical Analysis: Yesterday’s Low is Broken

Dear Traders,

The GBP/CAD is still bearish. The pair has broken yesterday’s lows before spiking higher. The GBP was bought early in the morning session.

We need to have in mind that the deadline for extending the Brexit transition period is on 30 June. This bounce is contributed to a sort of optimism but all GBP crosses have a headline risk now. At this point I still see the CAD stronger than GBP. Yesterday’s lows have been broken and the price is rejecting THU highs. We should expect a bearish continuation towards 1.6880.

The Analysis has been done with the CAMMACD.Core and Sit Systems

For a look at all of today’s economic events, check out our economic calendar.

 

GBP/CAD Technical Analysis: Retracement in Progress

Dear Traders,

The GBP/CAD had formed a potential retracement above W L3 support, which is in confluence with M L5 camarilla support. The price should go up.

At this point we can also see a small inverted head and shoulders pattern which indicates bullish pressure. For a continuation to the upside, the pair needs to close above W H3 camarilla pivot – 1.7075. A close above that level will give additional bullish impulse to the price and we should see 1.7117 and eventually 1.7186.

The Analysis has been done with the CAMMACD.Core and Sit Systems

For a look at all of today’s economic events, check out our economic calendar.

 

GBP/CAD Bearish Channel Still in Play

Dear Traders,

The GBP/CAD is bearish. However, the GBP has recovered a bit and bears need to keep the price below 1.7105.

If bears manage to keep the price below the ATR projected high, we might see another leg down. The POC zone is 1.7050-60 and rejections off that zone should bring the price down. We can see that the market is still following the zig-zag pattern and we should see a drop. Targets are 1.7020, 1.6990 and 1.6960. Only a move above 1.7105 will be a potential trend change in the pair.

The Analysis has been done with the CAMMACD.Core and Sit Systems

 

GBP/CAD Uptrend Much Stronger Above 1.7600

Dear Traders,

The GBP/CAD has come to the support and the price might be bouncing above the POC zone. The further move up will be stronger above 1.7600.

Chaotic market movements might have been caused by end month flows and fixing. Bounces close to 200 pips within different markets have been spotted. The GBP/CAD has formed a bullish bounce at the POC zone and the price should move up. If we see a new candle close above 1.7600, then the next target is 1.7646, followed by 1.7690 and 1.7716. A move below 1.7530 will invalidate this bullish scenario.

The Analysis has been done with the CAMMACD.Core and Sit Systems