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Rising Wedge on GBP/CAD from 1.6868

June 18, 2020 at 5:12 by Dorin Rosu

The Great Britain pound versus the Canadian dollar currency pair might be in the process of forming a rising wedge. Are the bulls ready to give up?

Long-term perspective

The sharp rise from the 1.6542 level got limited by the 1.7567 significant resistance level. As a result, after three consecutive failed attempts, the price dropped, piercing all the intermediary support levels except for the last, 1.6868. From here, the bulls took over and managed to reconquer the 1.6988 intermediary level, extending beyond the next one, 1.7132, but retracing under it, thus validating 1.7132 as resistance.

However, all the bullish efforts that came after the drop that started at the beginning of May begin to take the shape of a rising wedge. But as this chart pattern usually is indicative that what preceded it might continue after its conclusion, and since the movement that led to it is a depreciation, the bears are entitled to believe that their turn is just around the corner.

So, if the bulls are not able to take over the 1.7132 level, then the bears could make their next move, sending the price under the double support defined by the lower ascending trendline and the 1.6988 level, respectively.

If the bulls do manage to conquer 1.7132, they are still not out of the woods, as the bears may then wait for the double support formed by the same trendline and the 1.7132 to give way. If one of the two scenarios does materialize, then the bears could extend the decline until 1.6724, which is their main target, with 1.6868 being an intermediary one.

On the other hand, if the bulls manage to clear 1.7285, then they would have invalidated the rising wedge and increased their chances to revisit 1.7567.

Short-term perspective

The bulls are trying to keep the price above the 1.6965 firm support level. If they can pull off an appreciation and bring the price above 1.7094 and confirm this level as support, then they could eye 1.7244.

On the flip side, if 1.6965 submits to the bearish pressure, then 1.6842 is the next area that is to be paid a visit to.

Levels to keep an eye on:

D1: 1.7132 1.6988 1.6724 1.6868 1.7285 1.7567
H4: 1.6965 1.7094 1.7244 1.6842

If you have any questions, comments, or opinions regarding the Technical Analysis, feel free to post them using the commentary form below.

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