The GBPCAD currency pair has rallied after hitting multi-week lows as visible in this H4 chart. Currently this currency pair trades with plenty of bullish as well as bearish pressures acting on it as the most recent candlestick formed right around resistance from its descending 200 DMA. We believe this pair will reverse in the short-term before it will attempt to form a double top.
MACD has shown improvement over the past few sessions and we witnessed a bullish centerline crossover which points to potential future strength it this forex pair. RSI flirts with overbought territory and crosses into it on an intra-day base. We expect a short pullback in order for this currency pair to gather steam for a breakout.
We recommend a short position at 1.5485 which will act as a hedge to our existing long position we took on February 13th at 1.5615.
Traders who wish to exit this trade at a loss are advised to place their stop loss level at 1.5525. We will not use a stop loss level and will execute this trade as recommended. Place your take profit level at 1.5435.
Here are our reasons why we believe this currency pair will move lower
- Currency pair trades at resistance
- RSI flirts with overbought territory
- A pullback is required to ensure a further uptrend
- Profit taking
