In this article, we are drawing Pitchfork channels on GBPCAD.
On the weekly GBPCAD chart, we can see that the pair has broken below the uptrend Pitchfork channel boundary 1.7700 level. This break below the channel is an indicator that the medium-term uptrend is over and the pair is reversing to the downside, making 1.7700 a strong downside support level. Next big downside resistance visible below the channel is coming at 1.7080 level.
Using Andrews Pitchfork tool hint: to plot Andrew’s Pitchfork on a chart, first look for three consecutive big highs or lows at the asset’s price. These key points are highlighted in the chart below.
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We have used the combination of the top-down trading analysis and the Andrews Pitchfork channels to get to a trading entry stop loss levels and targets. On the daily chart, there is a new downtrend Pitchfork channel that could lead to a test of the Median line 1.6800 level upon a daily close below the 1.7080 level of the horizontal resistance. For the trade, entry wait for a daily close below 1.7080 level. In case of a daily close below this level enter at the market with the stop loss above 1.7100 and target 1.6800 level.
Happy trading! (click on the chart to enlarge it)