GBPCAD Near Resistance: Potential Short SetupThe GBPCAD pair is trading at 1.7786, approaching a key resistance level, which provides a potential short setup. Here’s the detailed analysis:
Key Resistance Zone:
The pair is nearing the resistance zone around 1.7800–1.7820, which aligns with the 50 EMA and 200 EMA acting as dynamic resistance.
This level also aligns with previous bearish "3s-Bear" signals, suggesting strong selling pressure historically.
Indicators:
The Stochastic RSI is approaching overbought territory, indicating the bullish momentum may be losing steam.
Price has yet to break convincingly above the resistance, hinting at possible rejection.
Trade Setup Options:
A. Sell Opportunity:
Entry Point: Consider entering a short position around 1.7780–1.7800, after confirmation of rejection (e.g., bearish engulfing candlestick).
Stop Loss: Above 1.7830, to allow for volatility.
Take Profit:
Target 1: 1.7720 (immediate support level).
Target 2: 1.7700 (strong support zone).
B. Buy Opportunity (If Breakout Occurs):
Entry Point: Above 1.7825, after a confirmed breakout with strong volume.
Stop Loss: Below 1.7800, to minimize risk.
Take Profit:
Target 1: 1.7900 (next resistance level).
Target 2: 1.7950 (recent swing high).
Market Context:
GBPCAD is attempting to recover from recent lows, but the resistance zone at 1.7800 is critical for determining the next direction.
Watch for geopolitical or oil market news, as the Canadian Dollar is sensitive to oil price movements.
Notes:
Wait for clear confirmation of rejection or breakout before entering any position.
Manage risk carefully, especially if trading near resistance, as price may exhibit volatility.
