Trade of the Day: GBP/CAD

By: Dima Chernovolov

GBP/CAD continues to rise inside the daily Up Channel chart pattern which was identified previously by Autochartist. Autochartist rates the quality of this Up Channel at the 5-bar level – which is the result of the slow Initial Trend (1 bar), significant Uniformity (7 bars) and above-average Clarity (6 bars). GBP/CAD is expected to rise further inside Up Channel – in line with the earlier breakout of the resistance area shown below.

As can be seen from the daily GBP/CAD chart below, the price earlier broke through the resistance area lying between the resistance level 1.7040 (which earlier revered the price twice in October), and the 61.8% Fibonacci correction of the previous downward impulse from May. This price area is acting as support zone after it was broken. The proximity of this support zone adds to the probability GBP/CAD will continue to rise inside this Up Channel.