GBPCAD, Daily
Yesterday’s (October 20) close saw GBPCAD close at a week’s high following a reversal from below 1.5950 on Monday. Tuesday’s hammer candle and close over 1.6100 suggested that the short term floor may be in, sterling then picked up across most pairs yesterday. A LONG position was opened today at 1.6140 with a short term target 1 at 1.6300 and target 2 at the 23.6 Fibonacci level and 20 DMA at 1.6515. The Parabolic SAR remains negative and the higher timeframes are still in down trends so this position is against the prevailing trend.
There are signs that that the relentless downward momentum and sentiment against sterling may at last be easing, at least in some currency crosses. GBPCHF formed a tweezer bottom last week and has edged higher over the last six sessions. The break over 1.2100 has been held and yesterday’s hammer candle confirmed a LONG position today at 1.2131. Target 1 is around the 14 Day ATR at 1.2268 and the 20 DMA, Target 2 is at the 50 DMA and the post Brexit 38.2 Fibonacci level at 1.2570. This position is against the higher longer term weekly and monthly time frames, so the move up may be limited.
Chief Market Analyst
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About Janne Muta, HotForex’s Chief Market Analyst
Janne Muta is a seasoned industry professional with over 16 years experience in the global markets. Originally from Finland, Janne has worked for institutions in both Helsinki and London as an institutional fund manager, global market analyst and FX educator.
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