GBPCAD went for the neckline (resistance)  to the head and shoulder pattern in daily on 20th August but failed to break above 1.76252 and reversed with a bearish impulsive closing above exponential moving average 200 i.e 1.72764 in daily time frame. This was followed by a bullish reversal which provided us with a closing above exponential moving average 50 in daily. The four hour time frame has itself formed a head and shoulder pattern of smaller degree with its neckline at 1.74232, GBPAUD failed to break above this resistance but the bearish reversal structure seems to be limited because of the friday closing which was given above the exponential moving average 200 in daily. Calculating the momentum of GBPAUD, MACD in four hourly time frame is showing a shift of strength from bears to bulls while on daily the hawks are losing their edge which indicates psychological sentiments of neutrality and wait for a breakout above 1.7450 or below 1.7280 to have a clear understanding of the further market move. 

BULLISH AND BEARISH CONDITIONS/ POSSIBILITIES :

Great Britian Pound versus Canadian dollar gave us a friday closing above the 50% fibb retracement level which is a critical game changer zone because if we got a bearish impulsive closing below from the aforementioned - 1.7230 will be the next stop for GBPAUD. This would bring the pair below our ichimoku cloud in daily with a breakout from head and shoulder structure in four hourly time frame as well; this would be the continuation of the bearish trend. On the other hand, observing the current market structure in daily, we are optimistic about Pound to drag Canadian dollar towards 61.8% fibb retracement level because if you look in weekly, GBPAUD reversed from exponential moving averages 50 and 200 with a closing above previous major support line. Also lets not forget the Doji candlestick formation in monthly time frame that might surprise us, thats why its better we wait for a breakout above 1.7450 or below 1.7280 to have a clear understanding of the further market move. 

GBPCAD

Aug 29 2021

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