FxWirePro: GBP/CAD mounting downtrend slides through falling wedge and most likely 3-black crows formation on major trend

In short term trend, the pair has been sliding through falling wedge pattern. Every price spikes are restrained below wedge resistance and every dip is backed by wedge baseline.

The bearish pressure is again observed despite today’s upswings, bulls restrained at around 21SMA levels, as the robustness in both short and long term bearish sentiment gets confirmation from today’s shooting star and yesterday’s railroad candlestick patterns. Shooting star has occurred at 1.6287 and railroad pattern has occurred at 1.6302 levels.

On a broader perspective, you could probably make out, as and when the pair approaches 7 and 21 EMA it has considerably tumbled in the recent past (refer monthly plotting), now more dips on cards as the bearish pressure is observed after the current prices restrained below 7EMA.

If the slumps extend further or hold onto current levels without any abrupt spikes, then we would see 3-black crow candlestick pattern (on monthly chart).

We call it for a more bearish rout on the table upon break below support @ 1.6345 & most likely 3-black crow pattern, this bearish indication is confirmed from both leading and lagging oscillators.

On both intraday and monthly RSI oscillator, we see consistent convergence to the prices declines.

While slow stochastic has been a caution for aggressive bulls, we could foresee that there is still visible selling pressure.

Well, for the day, although you see strong rallies on the intraday graph, these rallies are dubious to sustain further, the major bear downtrend seems robust.

To substantiate, MACD signals the major downtrend likely to prolong further.

Well, having said that we wrap up with concluding note, short term aggressive bulls can speculate this pair via tunnel spreads, whereas long term investors at current juncture contemplating above bearish indications, we advocate shorting futures contract of mid-month or near month expiries for target towards 1.5964 and 1.5724 or even upto 1.5531 levels cannot be ruled out upon breach of 1sttwo targets.

Writers in a futures contract are expected to maintain margins in order to open and maintain a short futures position.

While tunnel spread is likely to fetch leveraged yields than spot FX and certain yields keeping upper strikes at 1.6340 and lower strikes at 1.6275 levels.

Currency Strength Index: FxWirePro's hourly GBP spot index is at shy above 77 levels (which is bullish), while hourly CAD spot index is edging higher at 122 levels (extremely bullish) at the time of articulating (at 10:42 GMT). For more details on the index, please refer below weblink:

http://www.fxwirepro.com/currencyindex.

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