XM Group - Analytics

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    Technical Analysis – GBPCAD at risk of trend reversal

    GBPCAD has been trading in a range since mid-2015, between 1.9800 and 2.0970. If the important support level at 1.9800 is broken to the downside, this will confirm the formation of a double top chart pattern, which is a trend reversal pattern. Such a move would reverse the uptrend that was in place since the beginning of January 2013.

    The 38.2% Fibonacci retracement level at 1.9887 is acting as immediate support. This is the retracement level of the rise from 1.8147 to 2.0970 (the April to August 2015 rise). A bounce higher would find resistance at the 23.6% Fibonacci at 2.0300. As long as prices remain above the key 2.000 psychological mark and above the 200-day moving average, there is scope for more upside momentum. However a break below 1.9800 would confirm the bearish double top pattern and open room for prices to fall towards the 50% Fibonacci.

    Risk Warning: Forex, Commodities, Options and CFDs (OTC Trading) are leveraged products that carry a substantial risk of loss up to your invested capital and may not be suitable for everyone. Please ensure that you fully understand the risks involved and do not invest money you cannot afford to lose. Please refer to our full Risk Disclosure.

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