Trade of the Day: GBPCAD Testing Symmetry & Structure Resistance
Trade of the Day GBPCAD: Thursday is going to be a busy day for the UK currency. The Pound has been supported into Thursday, perhaps helped along by Wednesday’s higher claimant count print. However, with wage growth still rather subdued and with the Brexit overhang still something to watch, it seems risks to the topside are limited. Today we get UK retail sales and the Bank of England policy decision. The data and event risk are both capable of moving the Pound and while no change is expected on policy, it will be interesting to see how dovish a tone the BOE adopts. A report showing a massive buildup of distillate fuels with diesel and heating oil up by 4.6 million barrels versus calls of a more modest 1.5 million barrels, was one of the drivers behind Canadian Dollar weakness and relative underperformance on Wednesday.
Trade Idea: I am monitoring price action in GBPCAD today as we are testing symmetry and structure resistance, if we form a bearish outside reversal candle today I will look to enter short positions at the New York close initially targeting a move back to test the lower parallel of the pitchfork at 1.70 a failure below here would suggest the current correction is complete and return to trend is underway as per the chart below.