In this analysis, I will cover three things:
  • The current landscape of the GBP/CAD ("today")
  • The market dynamics impacting GBP/CAD 3 years ago ("yesterday")
  • The "yesterday" to "today" story

Finally, I will address how the next 2 months will differ from today and conclude with an expected rate of 1.6799 for the GBP/CAD on the 1st of November 2013.

The current landscape of the GBP/CAD ("today")

GBP/CAD is currently trading above the weekly range but within the monthly range. With the daily support line at 1.5910, we can expect further upside towards 1.7754 within the next 6-9months.

Figure 1. GBP/CAD chart (July-12 to Aug-13)

Daily Range: 1.5646 - 1.5910
Weekly Range: 1.5299 - 1.6086
Monthly Range: 1.4873 - 1.7754

The market dynamics impacting GBP/CAD 3 years ago ("yesterday")

Three years ago, GBP/CAD formed a base pattern with an associated speed velocity projectile (maroon segment line in Figure 2). For the following months, GBP/CAD has not traded above the high set at 1.6462.

Figure 2. GBP/CAD chart (Jan-10 to May-11)

Speed velocity projectile formed from 13-05-10 to 05-08-10

and extended over a 1672 pip range

The "yesterday" to "today" story

As expected, for the last few years, GBP/CAD has been trading within the base pattern set 3 years ago until recently when the GBP/CAD traded to 1.6510 on the back of GBP strength relative to the USD. This coincides with uncertainty in Syria as portrayed clearly in oil sentiment risk.

With the alignment of both the past and the current landscape, we can expect further upside in the GBP/CAD over the next few months.

How will the next 2 months differ from today?

Using the identical speed velocity projectile (in Figure 2), we can project forward the price trajectory for the next few weeks. Following a possible re-test of the 1.6324 support, we can expect the GBP/CAD to test higher highs following.

Assuming the validity of this speed velocity projectile, we will expect the 1st of November to coincide with a minor retracement and hence I place my forecast at 1.6799.

Figure 3. GBP/CAD chart (Forward projection to Jan-14)

The speed velocity projectile is replicated from Figure 2

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