GBPCAD Testing Slope Resistance- Long Scalps at Risk Sub 1.84
- GBPCAD testing multi-month slope resistance
- Breach needed to keep long bias in play
- Key support at monthly low / 2015 open (1.8087)
Chart Created Using FXCM Marketscope 2.0
- GBPCAD testing slope resistance- possible near-term inflection point
- Key resistance 1.8476/80- backed by the February ML,1.8685 & 1.8850
- Key support 1.8146, 1.8087– bullish invalidation
- Daily RSI resistance trigger pending- breach would constructive (post 40-hold)
- Event Risk Ahead: BoE Minutes tomorrow, UK Retail Sales on Thursday & US Durable Goods Orders on Friday
Notes:The GBPCAD has come into resistance at a slope inflection zone we’ve been tracking since March after rebounding off the 78.5% retracement of the 2015 range. Note that although the weekly OR looks to have broken to the topside, the focus remains on the highlighted region just below the 1.84-handle with a breach above keeping the long bias in play targeting more significant resistance at 1.8476/80. This region is defined by the March swing low and a basic 23.6% retracement of the decline off the February high.
Bottom line: our immediate play looks for short-triggers below this region with our base case scenario targeting one more low in the pair before reversing higher (near 1.8087?). A breach above 1.8480 targets the median-line extending of (~8650) & the April highs. A quarter of the daily ATR yields profit targets of 42-44pips per scalp. Unless the BoE minutes reveal a growing decent within the committee, another unanimous vote may do little to shake up the British Pound as the central bank retains a wait-and-see approach ahead of the May 7 election.
* It’s extremely important to give added consideration regarding the timing of intra-day scalps with the opening ranges on a session & hourly basis offering further clarity on intra-day biases.
Relevant Data Releases
Other Setups in Play:
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---Written by Michael Boutros, Currency Strategist with DailyFX
For updates on this scalp and more setups follow him on Twitter @MBForex
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