GBP/CAD edged north on Thursday, breaking above the 1.7665 barrier, marked by Tuesday’s high, thereby confirming a forthcoming higher high on both the 4-hour and daily charts. This, combined with the fact that the rate is trading above the upside support line drawn from the low of December 11th, paints a positive near-term picture in our view.
We believe that the break above 1.7665 may have opened the path towards the 1.7795 hurdle, which is marked as a resistance by the high of March 31st, 2020. If the bulls are strong enough to overcome that obstacle as well, then we may see them putting the 1.7923 territory on their radars. That territory provided strong resistance on March 10th.
Shifting attention to our short-term oscillators, we see that the RSI rebounded from near its 50 line and is now heading towards 70, while the MACD lies within its positive territory and appears ready to move back above its trigger line. Both indicators suggest that the rate has started regaining upside speed, which supports the notion for further advances.
In order to abandon the bullish case and start examining a bearish reversal, we would like to see a decisive dip below 1.7477, a support marked by the low of February 8th. The rate would already be below the aforementioned upside line and may initially slide towards the low of February 4th, at 1.7350. Another break, below 1.7350, could extend the fall towards the 1.7200 zone, defined as a support by the low of January 20th.
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