The Great Britain pound versus the Canadian dollar currency pair seems to have been favored by the double bottom formation, spawning an appreciation that allows the bulls to test the trendline for weak points.
Long-term perspective
After the level of 1.7567 proved to be an unmountable resistance, the price began a very convinced descending movement. This brought the price under the ascending trendline and close to the major support level of 1.6724.
From this area, the bulls got back in business, drawing a double bottom formation with the neckline at the 1.6988 intermediary level. After the neckline got pierced, the bulls printed a strong rally, one that reached the descending trendline.
From this point onward, one possible scenario is the one in which the bulls allow the bears to carry their waters, by letting them define a throwback towards the neckline of the double bottom, 1.6988, respectively. Of course, this works in favor of the bulls, as they wait to join the market at even better prices after a support level has been validated.
Another scenario goes for a consolidation phase that develops in the range of the previous day’s candle. In both scenarios, the first target is represented by 1.7132, followed by the double resistance etched by the ascending trendline and the 1.7285 intermediary level.
Only if the price validates 1.6988 as resistance, then the bears could send the price to 1.6868 and maybe even to the firm 1.6724 support area.
Short-term perspective
From the 1.6769 low, the price began an ascending movement that was able to pierce and depart from the strong 1.6965 level, stopping at the 1.7095 intermediary level.
From there, the price retraced, but not enough to reach the 1.6965 level. So, as long as the price oscillates above the ascending trendline, the bulls can conquer 1.7094 and head for the peak of 1.7175.
On the flip side, if the price gets under the double support noted by the 1.6965 level and the ascending trendline, then the bears could extend the decline until 1.6842 and even to the area of the 1.6797 low.
Levels to keep an eye on:
D1: 1.6988 1.7132 1.7285 1.6868 1.6724
H4: 1.6965 1.7094 1.6842
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