GBP/CAD Looking to Bounce Off 78.6%
Quite a few signals lining up. Today I have introduced Bollinger bands to the equation due to multiple signals suggesting the reversal for GBP/CAD
Daily Bollinger, 1-hour Bollinger, 78.6% Fibonacci and double bottom all coincide for a possible bounce. Would like to see a strong bullish engulfing, hammer, piercing, two bar reversal or dragon fly to confirm the GBP/CAD reversal.
- Daily – Price outside Bollinger band and at 78.6% Fibonacci retracement
- 1 Hour – Price outside Bollinger band
- Double bottom support level from September 23rd low
- Caution – Price holding below the 200 EMA
- Caution – Price holding below the 50 EMA
- Looking for a bullish candle at the 78.6% retracement
- Large spike in volume but price stale
- RSI crossing above oversold 20 extreme
Support – 1.69015, 1.68800
Resistance – 50 EMA, 200 EMA, 1.70320, 1.71265
Optimal entry provides the greatest reward to risk ratio while supporting entry is a zone for reversal signals.
Optimal Entry – 1.69400
Supporting Entry – 1.69550
Candle Reversals for entry
- Bullish Hammer
- Bullish Engulfing
- Bullish Piercing
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 1.68799 – 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 1.69400 – Target 1 1.70320 = 1.5x Reward to Risk
Optimal Entry 1.69400 – Target 2 1.71265 = 3x Reward to Risk
Supporting Entry 1.69550 – Target 1 1.70320 = 1x Reward to Risk
Supporting Entry 1.69550 – Target 2 1.71265 = 2x Reward to Risk