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GBPCAD - Inverse head and shoulders pattern forming?

已更新

Analysis:
Price last week managed to put in a new higher high showing us that we're in an upwards trend meaning that we only want to be going long on this pair. At this level we saw that price held as support if we look left so we expect that it will hold again. Now for this particular setup we don't have any fib levels which we usual look for but we do instead have another pattern, an inverse head and shoulders pattern. This is a bullish chart pattern which is often followed by a bullish move after the second shoulder is formed which is what we expect and this second shoulder lines up with our support level. To add further to this level of support we have a previous downwards trendline that was broken and now is being retested for support. We expect that buyers will set here and will want to hold this level making it a good buying opportunity. Taking a look at the fundamentals we have the GBP which is the 3rd strongest major currency compared to the CAD which is the 2nd weakest major currency so this is already going in our favour, but we get even more confluence as we dig deeper. As of the most recent report for institutional positioning on the CAD we saw an increase in both long and short positions so this is pretty neutral but this isn't the same story for the GBP. As of the most recent report on the GBP for institutional positioning we saw an increase in long positions and a decrease in short positions showing the strength of the GBP and we expect that this will continue. Overall the technicals and the fundamentals are pointing to bullishness on this pair which is why we have our long bias on GBPCAD.

Please feel free to leave any comments you have and like this idea if you agree with us. Any feedback or comments will be read. We appreciate it all.
Stay Safe - JPI

Disclaimer:
This does not constitute as financial advise. We are not responsible for any monetary loss that you endure. Trading is hard to be profitable with and we take losses just like everyone else does to. Our ideas won't always be correct which is why we urge you to always do your own analysis first before entering into the market but please feel free to use our analysis to assist you with yours.

交易進行

Our entry criteria has been met and our order has been filled so we're currently long GBPCAD expecting that we will continue to see GBP strength pushing price higher!

註釋

Update - 1
This is a trade that we're very confident in already and we've got even more reasons to be confident now. As of the most recent report on institutional positions we saw a massive increase in long positions and we also saw a massive decrease in short positions on the GBP so this is looking very bullish for the GBP which supports our idea. To further our idea yesterdays candle close gave us a bullish engulfing which is a bullish candle stick pattern is often the sign of a reversal which is what we want to see, so this is currently looking very good for our trade. Yesterday as well we saw a huge move to the upside which shows the momentum behind the GBP so this give us even more confidence in our trade. Yesterday we had some figures come out for the CAD which we worse then expected which again favours our idea and gives us even more reason to be bearish on the CAD or bullish on this pair. Later today we have BOE Gov Bailey speaking which if bullish we'd see a further push to the upside, again this would further support our trade. If the news is bearish then we will have to see how the market reacts as the CAD is very bearish at the moment so we don't know how the market will handle this. Once we see how price reacts we'll let you all know our thoughts.

註釋

Update - 2
Yesterday we were waiting for BOE Gov Bailey to speak and give us even more reason to be bullish on the GBP however this wasn't the case. The talk didn't sit well with GBP bulls and this was reflected in the price. We saw a pullback from the big initial spike that we had in the morning prior but towards the end of the day we did see price start to head back to the upside showing the momentum behind the GBP. Personally we believe that this pullback yesterday was an over exaggeration and with the GBP strength and bullish pressure we're still very confident in this setup and will be until we're given a reason not to.

註釋

Update - 3
On Friday we saw very strong bullish momentum as we held our entry area and made a significant move to the upside, showing the bullish pressure we have along with the GBP strength. Currently price is at a area of resistance which we'll be looking for it to be broken and price to continue its move to the upside and with the current market conditions this does look very likely. We've also seen a symmetrical triangle form which is a neutral pattern however because of the GBP strength, we expect that we will see price breakout to the upside, continuing the trend that we're currently in, favours our bullish thesis. Our trade benefited a lot from the bounce on Friday and we don't see any reason for this momentum to stop just yet, giving us more confidence that our trade will result profitable.

註釋

Update - 4
As of the most recent report for institutional positioning for the GBP and CAD we saw an increase in long positions for the GBP and the CAD whilst also seeing a decrease in short positions for the GBP and CAD. Whilst this does seem neutral the figures for the CAD were a lot higher showing strength for the CAD, which doesn't favour our idea and this is something we'll be keeping an eye on. Fundamentally we do still prefer the GBP over the CAD but again this is something we'll be watching. Currently price is held up at an area of resistance but this was expected and we called this our in our previous update. With the strength of the GBP we expect that price will break above this area and will continue to the upside. The GBP strength is clear to see and it's easy to see price wants top break higher, however currently there isn't a big enough catalyst to make this happen but we could finally get this catalyst on Friday this week as we have some important news coming out for the CAD. We have employment change and unemployment rates coming out and if these both come out bearish then this will give us what we need to see price breakout to the upside and with our current view on this pair and on the CAD this is what we personally expect but we could be wrong. One things that we're sure of is that we'll update you once we see the news release and how the market reacts to the data.

交易結束：目標達成

Trade Closed
(+1.09R) Made
After Trade Comments:
This was a good trade for us. We could see the GBP strength right from when we entered and we saw this strength continue the whole way throughout this trade. Overall we're happy with this trade and it was a nice little setup to catch. Well done to those who caught this setup with us! Time to move on and look for the next setup.

Stay Safe - The JPI Team