By: Mike Kulej
This year, so far, has been relatively volatile in Forex trading. Some currencies reached record levels, while others showed dramatic reversals, mainly in early January. However, a few pairs have done very little in terms price progress and the GBP-CAD is one of them.
The British Pound-Canadian Dollar pair has been under consolidation for a few months now, with every reversal resulting in a smaller price swing. No the daily chart we can see no new highs or lows made recently. In fact, the tops are getting lower while the bottoms are getting higher, forming a triangle.
In most cases, triangles lead to more decisive moves, when the price breaks out of the pattern. Here we have a symmetrical triangle (more or less) which offers no clues about future direction of the GBP-CAD. If anything, it favors continuation of the trend preceding its formation, which, in this case, means bearish.
Right now, the price is slowly approaching the apex of the triangle suggesting increased activity in the near future. The size of this formation indicates a possible breakout at around 1.5500 to the downside or 1.5950 on the upside. That could be a start of a 500+ pips new trend in the GBP-CAD.