Background:
- On 6th May I published fully annotated charts and analysis of GBPCAD, including my personal trade plan.
- See the original charts, analysis and trade plan HERE > https://charlesclifton.co.uk/gbpcad-gbp-tanks-post-boe-eyes-1-5300/
Since publication, GBPCAD has:
- Reclaimed the 1.5900 handle
- Has come and gone from my Forex Strength Vs Weakness Tables – Link to Live Tables HERE
- Continued to rally to bear Trendline resistance
- Is currently testing the downtrend
Current Narrative:
- The current narrative remains to the downside
- Price has consistently set lower highs
- These lower highs have been constrained within a bear trendline
- GBP remains overall pressured, particularly in light of further forthcoming UK/EU Trade Deal negotiations
- CAD remains buoyant, given the international market price of Oil holding circa $115 a barrel
- Price did find a floor/support at the 1.5800 handle, below which we see a prior rising but as yet untested trendline, anchored May ’10 and formed Oct ’16
- ADX: 8 Hour ADX(W) shows buyers and sellers converging with sellers remaing in control and a strong (25+) trend strength
- Stochastic: Sto shows (I believe) short term buying strength indicative of a retracement rally
My Call:
- As stated in my original post, should a retracement to trend occur I will/have now applied a bearish Fibonacci
- A slight upside breach of the Fib 62% retracement level gave clear contact with the bear trendline
- Having taken partial profit from the last short-side leg I will be adding to my remaining short position:
- At the US session open (1pm BST (UK))
- On the open of the new 8 Hour bar
- Below the 50% retracement level
- Ultimately I am targeting the original 1.5300 zone, but as ever I’m happy to take partial profits along the way, such as:
- At the 1.5800 prior support handle
- Shortly before contact with afore mentioned rising (untested) trendline, circa 1.5700
- And on contact with the existing bear trend channel support, circa 1.5500
- Obviously, should the above conditions not be met (i.e. the trendline test fails and we see an upside breakout) then I will not add to/enter a new position
Strength Vs Weakness / Caveat:
- A removal of either of these currencies from my S/W Trading Tables (HERE) would of course negate this entire trade plan
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