GBPCAD is back above 1.6
25 November 2022
This week was crucial for the USD as the FOMC Minutes showed that, most probably, the times of chunky hikes are over. The USD was not, however, the only important topic. Some instruments made important moves that changed the optics and gave promising, long-term trading signals this week. One of the examples is the hero of the day – GBPCAD.
The situation described here is valid mostly on the weekly chart, making it a treat for the long-term investors. For years (since 2016), GBPCAD had a golden support on the 1.6 (yellow) which was unbreakable until the middle of 2022. After the breakout, the pair collapsed 1800 pips but what was even more amazing was the quick recovery that occurred after the price hit the rock bottom in September.
Since the end of September, we have been witnessing a V-shaped reversal which led the price towards the 1.6, but from the bottom this time. The reason why this week is crucial is that the price managed to break above the 1.6, which in theory brings a whole new, long-term buy signal. This buy signal is here to stay as long as the price sticks above the yellow area, which is currently more likely to happen compared to the scenario of a comeback below.