Following a failed descending triangle formation, the pound is now clearly trying to reverse its long-term trend versus the Canadian dollar. The impending switch to an uptrend is signaled by the double bottom pattern on the weekly timeframe.
You can see the bottoms and the neckline marked by the yellow lines on the chart below. The cyan line is my entry level positioned at 10% of the pattern’s height above the neckline. The green line represents my potential take-profit level and is located at 100% of the same distance. I will set my stop-loss to the low of the breakout candle or to the low of the preceding candle in case the bigger part of the former is above the neckline. I will not trade the bearish breakout here unless the currency pair forms a new descending triangle before that. You can click on the image to see a full-size screenshot:
I have built this chart using the ChannelPattern script. You can download my MetaTrader 4 chart template for this GBP/CAD pattern. You can trade it using my free Chart Pattern Helper EA.
If you have any questions or comments regarding this double bottom on the GBP/CAD chart, please feel free to submit them via the form below.
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