GBP/CAD Price Prediction: Price flirts with lower boundary line of Rising Wedge pattern
- GBP/CAD falls to the lower boundary of a bearish price pattern.
- A clean break lower could indicate the start of a new downtrending cycle.
GBP/CAD falls to the lower boundary line of a Rising Wedge pattern and the level of the (red) 50-day Simple Moving Average (SMA) at about 1.7826. Rising Wedges are usually bearish patterns, however, there is no way of confirming this is such a pattern, although it looks very much like one.
GBP/CAD Daily Chart
A decisive break below the lower boundary line could see a decline to about the level of the 200-day SMA at around 1.7487. Further bearishness could lead to a move down to a target at 1.7364.
A break below the red dashed line on the chart at the key 1.7719 October 3 swing low would provide more cast-iron confirmation of a breakout and reversal in the medium-term uptrend.
GBP/CAD broke temporarily above the upper guardrail of the Rising Wedge pattern on several occasions (blue circles on chart) on September 20 and November 1. This could be a sign of bullish exhaustion and an early warning of impending reversal.
The Moving Average Convergence Divergence (MACD) momentum indicator has been flat recently but looks poised to break lower – a mildly bearish sign on the chart.
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