Trade of the Day: GBP/CAD

By: Dima Chernovolov

GBP/CAD continues to fall inside the 4-hour Down Channel chart pattern which was identified previously by Autochartist. Autochartist rates the quality of this Down Channel at the 8-bar level – which is the result of the fast Initial Trend (7 bars) and strong medium Uniformity  and Clarity (8 bars). GBP/CAD is expected to fall further inside this Down Channel – in line with the earlier downward reversal from the key resistance area shown below.

As can be seen from the daily GBP/CAD chart below, the price earlier reversed down from the resistance area lying between the key resistance level 1.6200 (former strong support from July which also reversed the price with the daily Evening Star earlier this month) and 61.8% Fibonacci correction of the previous sharp downward impulse from July. The proximity of this resistance area increases the probability GBP/CAD will continue to fall inside this Down Channel.