When you take a look at the daily chart for the GBP/CAD currency pair, you will see that the last three candles are bearish. This led the pair to 1.6513, the lowest level in two weeks, after it recorded the highest (1.6798) this month. Minutes ago the CPI was released from the UK and came as the previous one at 2.3%, better than the forecasted 2.2%. After this news the GBP/CAD rose by more than 55 pips to trade now around 1.6560.
The pair has been trading inside a wedge since last November and we think it's time for the breaking point. When we look at the pair on smaller time frames like the H4 we see the pair has touched the lowest level. Right now we can't predict whether it will break it or return to rise again. The Stochastic indicator is in oversold levels, which means we can buy the pair from here.
The Next Few Days
From this analysis on the daily and H4 charts we have to wait for a bullish candle on the H4 chart and buy the pair, placing our take profit at 1.6650 at the resistance level and around the SMA; our next target is at 1.6760. Nevertheless, if the pair doesn't form a bullish candle and breaks the wedge down we can sell it and keep our target at 1.6300.
We have to be careful in the upcoming days regarding hot news like the overnight rate and monetary policy from Canada in addition to a BOC press conference.
