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GBPCAD - Descending Wedge - Bulls about to take action?

FX:GBPCAD   British Pound/Canadian Dollar
173 0 5
8 months ago
Greetings Fellow Traders,

There are always price action and structure developments occurring. The waves of the market bounce around between currencies . On the near horizon one of the best looking setups that has taken on additional structure is happening right now on the GBPCAD             pair.

A Descending Wedge Pattern is a structural pattern that indicates Sellers continuing to drive the market lower, but getting more Buyers opposing them. This forces new lows...but at a much slower pace than the initial or previous moves. Typically price gets 'exhausted' for a moment and we rise back to where the Wedge Pattern formation began where Sellers attempt lows again or Buyers establish further dominance.

From a logical standpoint this means that USDCAD             is going to rise significantly, OR GBPUSD             is going to rise significantly. OR both. Take both of those with a grain of salt - GBPUSD             rising significantly is already on my radar (find the linked post below from over a month ago - this also correlates with GBPNZD             rise on my radar)

Enough background and storytelling - How should you prepare to trade this?

There are 2 common points of entry and 1 ideal target. The first and highest reward potential entry is actually occurring as of this publication. The bottom support of the wedge. This is also the riskier of the two entries as the market has not committed to the bullish move. The second entry occurs after a confirmed candle close above the wedge resistance and preferably on a retest of that same resistance as a new support. This retest does not always occur as the nature of these patterns are inherently explosive.

Targets are going to be 1.88000 and 1.90000 for this pattern, the former was the first swing high within the pattern and the latter is the high that began the pattern and the ideal target. Anything beyond 1.90000 is a bonus but even in the most extreme circumstances at this current point I would expect price to be limited below the 1.97 level.

I will be buying GBPCAD             on market open today - and holding for the targets listed above. I will add to my position if a retest opportunity occurs as well.

One additional note here is that this is the daily chart - the market moves at it's own pace - while market open today could give us the best possible priced entry, it does not mean price will move straight to the targets. These particular targets might take a couple weeks, if not more to be hit. They could also be achieved in one fell swoop. The opportunity has been identified, be patient, let the market trade.

Feel free to comment/like/follow.
7 months ago
Comment: This pattern continues to develop

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