GBP/CAD Daily Price Forecast – 14th May 2025

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Trade Summary:

GBPCAD
Buy Stop @ 1.85585
TP @ 1.85887
SL @ 1.85151

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GBP/CAD Analysis (H4 Chart)

Overview

The GBP/CAD chart provided is a 4-hour (H4) timeframe, showing a clear setup for a potential bullish breakout. The chart includes key levels for a Buy Stop, Stop Loss (SL), and Take Profit (TP), along with moving averages that provide additional insights into the trend and momentum.

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Key Levels

• Buy Stop: 1.85585

  • This level is set slightly above the current price, indicating a breakout strategy. The trader is waiting for confirmation of upward momentum before entering the trade.

• Stop Loss (SL): 1.85151

  • The SL is placed below a recent support level, providing a safety net in case the price reverses.

• Take Profit (TP): 1.85887

  • The TP is set near a resistance level, aiming to capture profits before the price potentially reverses.

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Technical Indicators

• Moving Averages:

  • Yellow Line (Short-Term MA): Indicates short-term momentum. The price is trading above this line, suggesting bullish momentum.

  • Red Line (Long-Term MA): Represents the longer-term trend. The price crossing above this line confirms a potential trend reversal to the upside.

• Candlestick Patterns:

  • Recent bullish candlesticks with higher highs and higher lows indicate strong buying pressure.

  • The price is consolidating near the Buy Stop level, which could lead to a breakout.

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Trend Analysis

• Bullish Momentum: The price is trading above both the short-term and long-term moving averages, signaling a bullish trend.

• Support and Resistance:

  • Support: Around 1.85151 (SL level), where the price has previously bounced.

  • Resistance: Around 1.85887 (TP level), which aligns with a previous high.

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Trade Setup

• Entry: A Buy Stop at 1.85585 ensures entry only if the price breaks above the resistance zone, confirming bullish momentum.

• Risk-Reward Ratio: The distance between the Buy Stop and SL is smaller than the distance to the TP, offering a favorable risk-reward ratio.

• Potential Outcome: If the price breaks above 1.85585, it is likely to test the TP level at 1.85887. However, if the breakout fails, the SL at 1.85151 will limit losses.

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Market Sentiment

• The chart suggests a bullish sentiment, with buyers gaining control. However, the consolidation near the Buy Stop level indicates that the market is waiting for a catalyst to push the price higher.

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Conclusion

The GBP/CAD pair is showing a bullish setup on the H4 chart. A breakout above 1.85585 could lead to a rally toward 1.85887. Traders should monitor the price action closely and ensure proper risk management by adhering to the SL and TP levels.

Recommended Lot Size

Trading is all about statistics.

While we can experience winning streaks, we can also suffer from losing streaks.

As such, we should always size each trade to withstand losing streaks (if any).

It's widely recommended that you should not risk more than 2% of your capital for each trade.

We believe it's easier to control your lot size by limiting your lot sizing to 0.01 for every $500 in your account.

So if you have $5000, then risk no more than 0.10 lot size per trade.

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If you spot a mistake especially when it comes to the price, please use common sense and check the chart.

We wish you good luck and good profit for this trade idea.

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