Today we will have a look at GBPCAD. I think the pair is going to move down in short term. The pair may drop all the way to the lower band of Bollinger or may be a bit lower towards the up-move trend line as plotted on the 4 hour chart shown below.
So, we would be looking to sell rallies in GBPCAD. Any rally on the 15 min chart should present a sell opportunity. If the pair pushes to the upside at around 1.6760, 1.6780 and 1.6800, and forms a bearish hidden divergence on the 15 min chart or on 1 hour chart with a bearish candle pattern, then we will enter into a sell trade. We can also enter into a sell trade if there is some other pattern like a flag is formed.
Initial target should be around the opposite Bollinger band on the 4 hour chart and final target could be around the trend line as shown above at around 1.6580. Stop should be placed above the previous high.
Reviewing yesterday’s events and trades
US dollar was seen on the back foot yesterday as ADP Nonfarm employment change declined to 166K, missing the expectations of 180K. Other than this ECB kept the official cash rate unchanged at 0.5%. ECB President Draghi was not seen much worried about the EURUSD exchange rates, which helped the EURUSD to climb higher. EURUSD broke 1.3600 and traded higher. Other majors like GBPUSD and AUDUSD too found some support and pushed higher.
Fundamental Outlook for the day
Today, Initial jobless claims data is scheduled later in the NY session, which is expected to rise from 305K to 313K. It would be interesting to see whether jobless claims fall further or rise. Other than this US ISM Non-Manufacturing index is also lined up. There is no resolution found on the US shutdown and the longer it takes, higher would be the effect in the market. So, trade cautiously as any news may trigger big moves in the market.
This analysis is taken from today’s Daily Market Forecast, which also includes trade opportunities on: EURUSD, EURGBP, GBPUSD, USDCAD, AUDNZD, AUDUSD, EURCAD and DOW JONES.
Get it HERE: Vladimir’s Markets Forecast
Trade safe friends. Happy trading!
