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Seller may target the 1.7300 level: GBP/CAD technical analysis

By Nathan Batchelor

12:36, 7 May 2020

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In this article:
GBP/CAD
GBP/CAD
1.65165 USD
0.00165 +0.100%

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GBP/CAD technical analysis

The GBP/CAD pair has started to turn lower on the foreign exchange market, as the British pound weakens across the board.

GBP/CAD technical analysis  shows that a bearish head and shoulders pattern is pointing to losses towards the 1.7300 level in the near-term.

GBP/CAD medium-term price trend

The GBP/CAD pair has started to turn lower as the British pound weakens as UK economic PMI data deteriorates. 

GBP/CAD analysis shows that the pair remains technically bullish over the medium term while price trades above the 1.6950 support level.

GBP/CAD technical analysis

The daily time frame continues to show that the GBP/CAD pair is trapped within an extremely large head-and-shoulders pattern.

Until the pattern either breaks to the downside or is invalidated, range bound trading between the 1.6500 and 1.8400 levels appears likely over the medium term.

According to technical analysis, a break above the 1.8000 level is needed to encourage buying towards the 1.8400 level. 

Natural Gas

2.70 Price
-5.430% 1D Chg, %
Long position overnight fee -0.0507%
Short position overnight fee 0.0295%
Overnight fee time 22:00 (UTC)
Spread 0.005

US100

12,030.00 Price
-1.140% 1D Chg, %
Long position overnight fee -0.0181%
Short position overnight fee 0.0071%
Overnight fee time 22:00 (UTC)
Spread 1.9

ETH/USD

1,589.10 Price
-3.580% 1D Chg, %
Long position overnight fee -0.0500%
Short position overnight fee 0.0140%
Overnight fee time 22:00 (UTC)
Spread 5.00

XRP/USD

0.40 Price
-2.960% 1D Chg, %
Long position overnight fee -0.0500%
Short position overnight fee 0.0140%
Overnight fee time 22:00 (UTC)
Spread 0.00322

To the downside, a loss of the 1.7200 may encourage sellers to test towards the 1.6500 level.

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GBP/CAD short-term price trend

GBP/CAD analysis shows that the pair is bullish over the short term while price trades above the 1.7370 level.

Looking at the lower time frames a bearish head and shoulders pattern has been activated.

GBP/CAD technical analysis

According to the size of the pattern the GBP/CAD pair may decline towards the 1.7300 level over the near-term.

Watch out for more short-term losses in the GBP/CAD pair while price trades below the 1.7470 resistance level.

GBP/CAD technical summary 

GBP/CAD analysis shows that a bearish pattern has been activated on the lower time frames. Medium-term analysis indicates that price is likely to trade within the 1.7200 to 1.8000 price range.

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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