Trade of the Day: GBP/CAD

By: Dima Chernovolov

GBP/CAD continues to fall inside the daily Falling Wedge chart pattern which was previously identified by Autochartist. Autochartist rates the quality of this Falling Wedge at the 4-bar level – which is the result of the slow Initial Trend (4 bars), slow Uniformity (3 bars) and strong Clarity (9 bars). GBP/CAD is expected to fall further inside this Falling Wedge – in line with the earlier breakout of the support zone shown below.

As can be seen from the daily GBP/CAD chart below – the pair earlier broke the support zone lying between the key support level 1.7180 (former monthly low from April) and the 50% Fibonacci retracement of the previous upward correction from March. This price area is acting as the resistance zone after it was broken. The proximity of this resistance zone adds to the probability GBP/CAD will continue to fall inside this chart pattern.