GBP/CAD continues to hold above the upside support line, drawn from the low of the 30th of May. That said, at the same time, the pair is getting held by a strong area of resistance at around 1.7445. Thus, we remain flat as we wait for the BoC decision today, which could have its effect on GBP/CAD and force it to break through either the upside support line or the 1.7445 resistance barrier.
A strong break through 1.7445 could open the door towards some higher levels seen in June. The next potential resistance zone could be the 1.7555 area, marked by the peak of the 27th of June. If that area won’t be able to withhold the rate acceleration, then we could start aiming for the 1.7700 level as the next good area of resistance.
The RSI is currently above 50 and pointing higher. The MACD is just slightly above its zero line and is also trying to make a move above the trigger line. Both indicators detect upside speed, but as we already noted, we would prefer to wait for a break above 1.7445 before we get confident on the upside.
Alternatively, a break below the aforementioned upside support line could worry the bulls and raise some concerns about the upside potential. Certainly, let’s not forget that we could just get a false break like the ones seen on Monday and Friday last week. A good confirmation of a potential move lower could be a close of the 4-hour candle below the 1.7365 level, where we could then aim for some lower areas of support. The 1.7300 hurdle could be seen as strong support, as it also acts as the lower side of the range that the pair has been trading in since around the 28th of June. A break below could trigger some more selling and the rate could drop towards the 1.7255 area or even the 1.7200 level, marked by the 5th of June low.
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