Tuesday, May 29, 2012
$GBPCAD has been ranging for the last 3 weeks.
Notice how the lows of the previous 3 weeks have been quite close to each other. This clearly shows a good setup for range trading. The aim of range trading is simply to buy low and sell high and of course with price currently at the previous week's low, it could be a potential buy. Notice how I use the word potential. Price may decline further to test the middle box low before bouncing up.
In fact, the low of the previous week's low appears to be a well respected level where price bounce off in the past.
Market is currently very choppy with no clear direction, trade carefully. I would recommend to buy this pair only if it closes above 1.61021 with SL at 1.5620 with an average risk reward ratio of 1:1.
For bulls who are willing to undertake more risk, consider a buy at anywhere around 1.6030 - 1.6040 with multiple pin bars suggesting bulls are in control.