GBP/CAD Rotating After 1.7178 Low
The Great Britain pound versus the Canadian dollar currency pair seems to be setting the grounds for a new rally. Any signs of the opposite?
From the 1.6810 low, the bulls rose an ascending trend that extended until the 1.7496 high. From there, the bears came into play, sending the price beyond the previous low, at 1.6778.
Still, the bulls crafted a new movement towards the north, stretching it to the 1.7884 high, well beyond the previous one that sits at 1.7496.
Yet again, the bears did what they know best, thus generating a drop that noted the 1.7178 low. However, as the 1.7178 low is preceded by the one at 1.7235 and also managed to spawn an appreciation that departed significantly from it, the market may consider that an inverted head and shoulders pattern starts unveiling.
So, with 1.7235 indicating the low of the left-side shoulder and 1.7178 the head, the left-side shoulder is due. It may come into being after the price casts 1.7285 as support. Noteworthy is that the second shoulder may already be shaped, taking the form of the consolidation phase that sits above the 1.7285 intermediary area, after the price retraced from 1.7445 following the rise of 1.7178.
In this case, 1.7445 can be considered a neckline that, as long as 1.7285 remains support, is the next bullish objective. If checked, it leads the way to 1.7567.
Only if 1.7285 cedes and the 1.7178 low is taken out, the bears can hope to capture 1.7132.
After the price bounced off the 1.7244 firm support zone, it marked the 1.7435 high. Failing to secure the 1.7337 intermediary level made the bulls lose their upper hand and allow the price to pierce 1.7244 and print the 1.7178 low.
Nevertheless, the bullish determination sent the price back above both 1.7244 and 1.7337, respectively, defining the 1.7449 high.
If the bulls validate 1.7337, then 1.7487 is the first target, with 1.7626 being the second. This scenario still stands even if 1.7244 is paid a visit but resists the temptation of becoming a resistance; as if the opposite happens, 1.7094 is the main bearish objective.
Levels to keep an eye on:
D1: 1.7285 1.7445 1.7567 1.7132
H4: 1.7337 1.7487 1.7626 1.7244 1.7094
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Original from: www.earnforex.com
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