Looks Like A Bottom For Sterling
Alpari Research & Analysis | Jan 23, 2017 09:27AM ET
Two weeks ago we stated that GBP/USD was ready for a reversal. Now, Cable is around 200 pips higher, so we can see that everything is going according to the plan. We had huge fundamental help here from both: Theresa May and the global USD weakness, but technically it also looked decent.
In this analysis we will also focus on GBP but this time we will aim at a more exotic instrument - GBP/CAD, where the technical situation here looks very nice. Our view on this instrument is long-term and is based on the situation on daily and weekly charts. On the weekly timeframe, we have one significant reversal signal – candlestick bullish engulfing from the last week (yellow).
When we look closer on the daily chart, we can see some details of the latest trading, for example, triple bottom formation strengthened by the divergence on both popular indicators: MACD and RSI.
Unfortunately, to be precise, buy signal is still not fully here yet. What we are missing is a bullish breakout of the mid-term down trendline (blue) and long-term down trendline (red). It did not happen yet but is highly probable and should happen soon. If so, the potential aim for the bulls will be the green area, which is a resistance created by lows from 2014. We still do have over 900 pips to that place, so even if you wait a little bit for a confirmation, there will be enough pips left on the table for everybody.
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.