Market NewsTechnical Analysis

GBP/CAD: Significant Bullish Breakout but Not Enough Momentum

GBP/CAD
  • The pair made a bullish breakout at a channel in the H4 chart
  • The price has been heading towards the North with moderate pace
  • The H1 chart has been choppy
  • The level of 1.71350 has been working as a strong resistance in the H1 chart
GBP/CAD H4 Chart
GBP/CAD H4 Chart

GBP/CAD H4 Chart Made a Significant Bullish Breakout

The pair traded within a parallel channel for some days. On its fourth bounce, it produced a bullish engulfing candle and continued its journey towards the North. The price made a bullish breakout at the channel’s resistance and confirmed by consolidating there for a while. As expected, the buyers pushed the price towards the North upon getting a bullish engulfing candle at the breakout level. However, the price seems to have found its resistance around 1.71350. A breakout above that level may attract the buyers again to push the price towards the upside. The price may find its next resistance around 1.72300.

However, if the price continues to go towards the South, the breakout level may come under pressure to hold the price as a level of support. The pair may get choppy if it trades around the level of 1.70350.

GBP/CAD H1 Chart
GBP/CAD H1 Chart

The H1 Chart Favors the Bear

The H1 chart shows that the price made a strong bullish move by obeying a bullish trend line earlier. The price then had a rejection around 1.71350 and made a bearish breakout at the trend line. It then had multiple rejections at the same horizontal resistance. This may attract intraday sellers to go short in the pair and drive the price towards the South further. The price may find its first flipped level of support at 1.70350. The pair may get choppy around that level before finding its next route.

Considering these two charts, the H4 traders are to be patient to go long in the pair. On the other hand, the H1 traders may find some short entries before that breakout level comes into the game. Let us see how it ends.

Written by: Md Tareq Sikder, Senior Analyst Forex Prop News

Contact and follow Tareq on Twitter: @tareqfpn

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