GBP/CAD: Short Term Support Following 423 Pip Drop in September
GBP/CAD found solid support at 1.71320 from June’s old resistance.
GBP/CAD Short term trade has superior reward to risk ratio if optimal entry is obtained.
Caution: We are below the 200 and 50 EMA which will present price resistance once tested and this is a counter trend trade meaning our risk should not be adjusted. If failed, re access for entry.
- Price found support at 50% Fibonacci level of short-term range.
- RSI possible pierce through trend line and 50 mid-point simultaneously.
- IF: Trend line is Crossed, there is possibly more upside and partial position can be held with trailing stop loss.
- A close above 50 EMA will reassure us that the trade should see at least Target 1.
- Must watch price around the 200 EMA which coincides with Target 1.
- Looking for Bullish Candles to confirm entry
Support – 1.71320, 1.71720
Resistance – 1.72400, 1.72975, 200 EMA
Optimal entry provides the greatest reward to risk ratio while supporting entry is a zone for reversal signals.
Optimal Entry – 1.71640
Supporting Entry – 1.71750
Candle Reversals for entry
As traders, it is your job to mitigate the risk and only trade structures that provide high probability and great reward to risk ratios.
If you are not comfortable with defined exit levels, experiment with Moving Averages to help set solid exit rules to protect your capital.
IF: Price breaks below 1.71400– this would suggest the structure is not in our favour and would be wise to reduce exposure or close the trade until a solid signal gives us reasons to re-enter.
Reward / Reward Targets:
Optimal Entry 1.71640 – Target 1 1.72400 = 2.7x Reward to Risk
Optimal Entry 1.71640 – Target 2 1.72975 = 4.8x Reward to Risk
Supporting Entry 1.71750– Target 1 1.72400 = 1.65x Reward to Risk
Supporting Entry 1.71750 – Target 2 1.72975 = 3x Reward to Risk