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Bears Target 1.7285 on GBP/CAD?

January 14, 2021 at 5:37 by Dorin Rosu

The Great Britain pound versus the Canadian dollar currency pair seems to be heading southward. But is this the start of a new depreciation, or are the bulls setting up a rally?

Long-term perspective

The fall from the 1.7674 high, which is part of the false piercing of the firm 1.7567 resistance area, extended until the 1.6810 low.

From the 1.6810 low, the bulls started an appreciation phase that spanned for almost two times more than the fall from 1.7674.

Sensing the effort the bulls put in, the bears decided to make the situation even harder for them, crafting a new fall just after they managed to surface above the 1.7745 intermediate level. As a result, the price peaked at 1.7496 and then dropped until the 1.6768 low.

Nevertheless, the bulls etched another rise, this time much quicker than their previous one. Still, the level of 1.7445 limited their efforts, as the price printed the high of 1.7483.

However, as 1.5483 could have been the first high of a double bottom with the neckline at 1.7285 and as the chart pattern failed to spring a fall, it can be said that the bulls are still on the ball.

So, as long as 1.7285 remains support, 1.7445 is the next area to be checked by the bulls. If they manage to validate this target as support, they have a new chance for 1.7567.

On the flip side, if 1.7285 does cede, then 1.7132 is the next bearish objective.

Short-term perspective

From the 1.6768 low, the price started an ascending trend, lasting until the high that stopped a hair away from the 1.7487 intermediate level. That first high, together with the one at 1.7445 (as discussed for the daily chart), failed to play the double top chart pattern role.

The result of this was the appreciation that got the price back above 1.7244 and then stooped at the 1.7434 high.

If the bulls validate 1.7244 as support, then they can secure the intermediary level of 1.7337. Once 1.7337 is conquered, with or without 1.7224 receiving a visit, 1.7487 is the next bullish target.

Only if 1.7244 fails as support, then 1.7094 gets exposed.

Levels to keep an eye on:

D1: 1.7285 1.7445 1.7567 1.7132
H4: 1.7244 1.7337 1.7487 1.7094

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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