Trading opportunities for currency pair: with a bounce from the 2.0949 maximum, a double bottom is starting to form on the daily. Any further revival of oil prices will see the GBP/CAD drop to 2.0340.
The last GBP/CAD idea I made came out on 16th November. When the review was published, the pair was trading 2.0297. Due to falling oil prices, following a bounce to 2.0200, I was expecting to see a break through 2.0335 with a 2.0500 target. The idea didn’t come off since Brent stopped falling from 13th to 22nd November. Correspondingly, the GBP/CAD rate couldn’t pass the resistance. The pair was trading in a narrow range and under the resistance throughout the week.
When Brent hit $46.5 per barrel, the GBP/CAD dropped to 1.9849. The rally on the cross started only on 3rd December after a fall in oil quotes and a weakening of the Canadian throughout the market. Due to a weakening of the Canadian dollar and a fall in oil quotes, the GBP/CAD rose to 2.0949.
Now a few words on the current situation. The technical picture is really interesting. A double bottom has appeared due to a bounce from 2.0949 to 2.0560. If we take into account that Brent is now undergoing an upward correction, it’s pretty likely that we’ll see a further fall to 2.0340 for the pound against its Canadian counterpart. We’ll see how things go in the New Year.
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