GBP/CAD trap trade in progress
(Nenad Kerkez – Top-XE)
GBP/CAD technical analysis
- GBP/CAD trend should continue.
- Yesterday’s candle low broke previous lows.
- Pinbar rejection.
- Trap trade.
- 1.5050 is intraday target.
MEGATREND MAs: Bearish
D1 chart GBP/CAD
1. Trendline touch.
2. Strong support at Q L4.
3. Trap entry.
4. Intraweek target.
5. Swing target.
The GBP/CAD is still bearish. Yesterday’s Bank of Canada decision was to hike 75 bps which was already discounted in price. However, the statement itself was hawkish as the BOC will continue to fight inflation strongly. That is a cue for further rate hikes and a sign of hawkishness.
The first entry I had was closed yesterday with +53 pips profit. Today the price retested the lower MA which called for another short entry as a trap trade. Ideal trap entry was at 1.5141. Keep in mind that yesterday’s candle broke previous lows which is a sign of continuation. The intraday target is 1.5050 ( it’s almost a +100 pips intraday trade potential) with 1.4928 and 1.4676 as swing.
EUR/USD: Calm market before Lagarde and choppy trading after
(Vasilis Tsaprounis – TopFX)
The common European currency remains in the area near to 1/1 after yesterday’s strong upward movement and awaiting today’s decision by the European Central Bank to raise interest rates.
As bets have increased for a possible 75bp hike several investors have already positioned themselves in favor of the euro since yesterday.
A possible increase of 75 points will certainly narrow the gap between Ecb and Fed but it may not be enough to change the medium-long term dynamics of the pair and beyond an upward deflection perhaps the moment has not yet arrived to change the exchange rate momentum.
The energy crisis affecting Europe remains a high level of concern despite the reduction in oil prices and although the actual facts are not so devastating the prevailing psychology is different.
Yesterday’s upward movement confirmed once again the assessment that the reactions from the European currency is still in play and we do not see any significant reason for this to change.
We are maintaining a wait-and-see attitude awaiting the decision on interest rates and the speech of the governor of the European central bank Christine Lagarde, seeing an increased possibility for a nervous trading day with intense variathion in both directions after the announcements.
And let’s not forget that almost parallel to the Ecb decision and the Lagarde speech we have on the other side of the atlantic the corresponding Fed governor to have his own comments.
So the chances of a choppy trading day are very high