GBPCAD BEARISH FOR 120 PIPSRisk-to-Reward Ratio: You're looking at a risk-to-reward ratio of approximately 1:2.4 (120 pips reward to 50 pips risk), which is generally favorable as it allows for larger potential profit relative to the risk.
Technical Analysis Setup:
Downtrend Confirmation: Check for confirmation of a downtrend by observing a series of lower highs and lower lows. You could also use moving averages (such as the 50 EMA and 200 EMA) to see if the price is below them, which would reinforce the bearish outlook.
Support and Resistance: Look for any major support levels around the 120-pip target. This will help confirm that price could reach this level without major barriers.
Key Indicators: Use RSI or MACD to confirm any overbought conditions, which would indicate the potential for further downside.
Entry Trigger: To increase your trade's precision, consider entering on a lower timeframe if there is a bearish engulfing candle, pin bar, or any other strong bearish price action.
Volatility and Timeframe: Ensure you're entering during a high-volatility period (such as a London or New York session overlap) if looking for a quicker move. GBP/CAD can be quite reactive to news from the UK or Canadian markets.
Managing the Trade: As the price approaches the 120-pip target, consider scaling out or adjusting your stop loss to secure profits while maintaining some exposure in case the trend continues further down.
