GBPCAD is at its highest level since 2020. Time to sell?
The GBPCAD is currently at a crucial resistance level of 1.8000, marking the highest point since 2020. The formation of a double top on the daily chart reinforces the notion of a potential bearish trend reversal. This reversal pattern indicates that the market is testing its ability to sustain prices above this resistance, yet has struggled to produce new consecutive highs, suggesting signs of buyer exhaustion.
Furthermore, the emergence of a pin bar on 15 October highlights a clear rejection of prices above 1.8000, illustrating that the market has rejected attempts to breach this resistance and swiftly retreated to lower levels. The pin bar is recognised as a reversal candle with significant bearish implications, indicating profound selling pressure. When this pattern occurs at important resistance zones, as seen in this case, it increases the probability of a downward movement.
Key Technical Indicators:
Price at its highest level since 2020 at 1.8000.
Formation of a double top on the daily chart.
Classic bearish divergence on the daily chart.
Formation of a pin bar indicating rejection of buying strength.
Potential for Downward Movement
Considering the above elements, a selling strategy could be justified if the price successfully breaks below the support level of 1.7920. This support level would serve as a trigger for confirming the anticipated downward movement. A breach of this level would indicate a loss of buying strength, paving the way for a sell-off towards lower support levels, such as 1.7750 and 1.7550.
Alert for Traders
In conclusion, the current market conditions and technical patterns suggest a bearish reversal may be on the horizon for GBPCAD. Traders should keep a close eye on the key support level of 1.7920, as a break below this point may present a valuable selling opportunity in the market.
Disclaimer:
74% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Past performance is not necessarily indicative of future results. The value of investments may fall as well as rise and the investor may not get back the amount initially invested. This content is not intended for nor applicable to residents of the UK.
Furthermore, the emergence of a pin bar on 15 October highlights a clear rejection of prices above 1.8000, illustrating that the market has rejected attempts to breach this resistance and swiftly retreated to lower levels. The pin bar is recognised as a reversal candle with significant bearish implications, indicating profound selling pressure. When this pattern occurs at important resistance zones, as seen in this case, it increases the probability of a downward movement.
Key Technical Indicators:
Price at its highest level since 2020 at 1.8000.
Formation of a double top on the daily chart.
Classic bearish divergence on the daily chart.
Formation of a pin bar indicating rejection of buying strength.
Potential for Downward Movement
Considering the above elements, a selling strategy could be justified if the price successfully breaks below the support level of 1.7920. This support level would serve as a trigger for confirming the anticipated downward movement. A breach of this level would indicate a loss of buying strength, paving the way for a sell-off towards lower support levels, such as 1.7750 and 1.7550.
Alert for Traders
In conclusion, the current market conditions and technical patterns suggest a bearish reversal may be on the horizon for GBPCAD. Traders should keep a close eye on the key support level of 1.7920, as a break below this point may present a valuable selling opportunity in the market.
Disclaimer:
74% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Past performance is not necessarily indicative of future results. The value of investments may fall as well as rise and the investor may not get back the amount initially invested. This content is not intended for nor applicable to residents of the UK.
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