GBPCAD - Overextended and Pricing in a weak CAD
Updated
This is another CAD pair that I look to play. GBP's news this week has not been positive while the coming expected good news such as Manufacturing Production m/m is on Friday and in my opinion the rally yesterday is quite premature especially with CAD rate decision due today.
The analysis is related to my USDCAD pick, looking at price action so far the GBPCAD pair can potentially a better play of CAD strength. IG Sentiment again showing net Long so I'll put on a contrarian hat.
Technical levels to watch are round numbers 1.62, 1.61 and Pivot levels 1.621, 1.611. I will look to go short nearer to the CAD announcement.
The analysis is related to my USDCAD pick, looking at price action so far the GBPCAD pair can potentially a better play of CAD strength. IG Sentiment again showing net Long so I'll put on a contrarian hat.
Technical levels to watch are round numbers 1.62, 1.61 and Pivot levels 1.621, 1.611. I will look to go short nearer to the CAD announcement.
Note
I prematurely enter around 1.616 level and got stopped out. This is a totally emotional trade, jumping the gun without much proper planning.Despite my underestimation of the GBPCAD strength, the initial thesis still intact, I think the rate Neutral decision is baked in to the price. If rate unchanged, people will TP and send the pair down, if rate hike or the statement hinting hawkish forecast the pair will go down even further.
Entry wise, now that it is pulling back to 1.62 I have another chance to short the pair.
Stop Loss will be above Pivot 1.6211
Note
CAD rate hike, the unexpected has happpened and this rolled over so many stop loss - mostly from retail traders.I'm out at 1.591. Still believe there is a lot weakness and certainly there will be other opportunity to trade CAD on pull back.
Market will shift its attention to the whole new sets of data to predict the next hike..although this time after the surprise hike (to 50% of people at least) I think BOC will be more careful in setting the market expectation and won't immediately make another hike soon.
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