Trade of the Day: GBP/CAD

By: Dima Chernovolov

GBP/CAD continues to rise inside the daily Rectangle chart pattern, which was recently identified by Autochartist. Autochartist rates the quality of this Rectangle at the 5-bar level – which is the result of the slow Initial Trend (3 bars), strong Uniformity (8 bars) and low Clarity (3 bars). GBP/CAD is expected to rise further inside this Rectangle – 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 located between the key resistance level 1.7145 and the 50% Fibonacci correction of the previous downward impulse from September.  This price area is acting as the support zone after it was broken. The proximity of this support zone increases the probability GBP/CAD will continue to rise inside this daily Rectangle.