03 Apr Update to GBP:CAD Analysis; 3rd April 2013
Following previous GBP:CAD analysis today I entered a swing long position from support.
To understand the history behind this position you’ll need to read this post and this follow up post. I still believe we’ll see an eventual break down through the support thats held GBP:CADs trading range over the last 3 Years, however as I pointed out before, another test of major support was very likely due to the lack of consolidation following the previous test.
I’ve absolutely no idea whether support will hold this time round and have simply based the trade on the fact that its held solid for the last 3 Years and therefore makes a good risk versus reward long entry. Now cue the major sell off by morning!
Here’s the Daily chart showing the last 3 Years of price action:
Initially I’ve set a 100 point stop loss but will be trying to gauge whats going on intraday in order to get out quick if the trade looks to be going awry as after such a long consolidation period a break down could be extremely powerful, in which case I would consider switching short.