In our previous report about the GBP/CAD pair last month we mentioned the channel breaking and recommended buying the pair after the break. We saw the prices rose last month but they haven't hit our target yet. This month the pair has been declining to reach down the moving average for the last 50 days around 1.6367 - it found a support level there.
The pair is now trading around 1.6500, below 38.2% Fibonacci but we expect the prices will break it up again to resume the correction wave and reach 50% and 61.8% and maybe more, if they break last month’s high after forming an inverted head and shoulders pattern. If the prices rose from here directly, the MACD indicator will start giving us a sell signal but the columns are still above the zero level.
The Next Few Days
The plan from here is straightforward. In case of any downward movement we will buy the pair to our main target at 50% - we can take a buy position now around 1.6500 and close part of the trade at 1.5710, and the rest of orders at 1.6850. That is in case the pair is still trading above 1.6223.
The manufacturing production was released from the UK and came in positive numbers at 0.4%, compared to the forecasted 0.2%. This week we don’t have any important news elsewhere from the UK or Canada but we have to look at the chart periodically even once a day in anticipation of any uncalendared news.
