The GBPCAD currency pair has been advancing in a bullish sequence since late 2023, bouncing from an equal leg area. This sequence is part of a larger diagonal structure that began in October 2023. The primary degree wave ((1)) was completed on 22nd April 2024 at 1.6888, followed by wave (5) of ((1)) which quickly rallied and completed its first leg, wave W.
Identifying Key Levels
On 9th May 2024, a chart was shared with members highlighting the importance of the 1.7080-to-1.7000 equal legs area for wave X completion. As expected, wave X of (5) found support at the equal leg of 1.7080 and bounced quickly. The chart from the 14th May update shows the price separating from the equal leg with an impulse for (i).
Future Expectations and Alternatives
Looking ahead, the price is expected to breach the top of wave (i) to pave the way for wave (iii) of ((a)) of Y. This would give the pair an opportunity to break the wave W high and properly initiate wave Y. However, there are alternative scenarios to consider. If the current dip for (ii) extends lower below X, a new extreme for wave X will need to be determined for new LONG positions. Ideally, the wave W high should be breached before looking for LONG positions after the next pullback completes 3, 7, or 11 swings in the extreme area.
Overall, the analysis of the GBPCAD bullish sequence provides insights into key levels, future expectations, and alternative scenarios. By carefully monitoring price movements and wave patterns, traders can make informed decisions about their trading strategies in the forex market.