GBP/CAD 4H Chart: Channel Down

Source: Dukascopy Bank SA
© Dukascopy Bank SA
GBP/CAD is set for a decline both in the short and long terms. The currency pair has recently broken though a major trend-line that has been guiding the price higher since the beginning of 2013. This line now implies a major supply zone between 1.94 and 1.93, where we also have the monthly pivot point and the 200-period SMA. However, the rate is unlikely to recover this high in the nearest future, being that the upper edge of the recently formed channel is at 1.89. Accordingly, we expect a sell-off from here down to 1.78/1.77, where the Sterling is to test the lower boundary of the pattern along with the last year's low and monthly S2. Meanwhile, the SWFX market participants are mostly bullish—70% of open positions are long.
© Dukascopy Bank SA
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