Two weeks ago we stated that GBP/USD was ready for a reversal. Now, Cable is around 200 pips higher, so we can see that everything is going according to the plan. We had huge fundamental help here from both: Theresa May and the global USD weakness, but technically it also looked decent.
In this analysis we will also focus on GBP but this time we will aim at a more exotic instrument - GBP/CAD, where the technical situation here looks very nice. Our view on this instrument is long-term and is based on the situation on daily and weekly charts. On the weekly timeframe, we have one significant reversal signal – candlestick bullish engulfing from the last week (yellow).
When we look closer on the daily chart, we can see some details of the latest trading, for example, triple bottom formation strengthened by the divergence on both popular indicators: MACD and RSI.
Unfortunately, to be precise, buy signal is still not fully here yet. What we are missing is a bullish breakout of the mid-term down trendline (blue) and long-term down trendline (red). It did not happen yet but is highly probable and should happen soon. If so, the potential aim for the bulls will be the green area, which is a resistance created by lows from 2014. We still do have over 900 pips to that place, so even if you wait a little bit for a confirmation, there will be enough pips left on the table for everybody.
