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by Darius Anucauskas

GBP/CAD Continues to Aim For the 1.6600 Barrier

It seems that there is no stopping for the GBP/CAD’s freefall. At one point, it looked like the pair found good support near the 1.6735 area, but from there it just started ranging until today, when it broke that support and rushed off lower. Even though the Canadian dollar has not been the strongest among the G10 currencies lately, we can see how weak the British pound is when we look at the GBP/CAD chart. The pair continues to trade below its steep short-term downside resistance line taken from the high of the 23rd of October, which, for now, could continue showing the direction that the pair could be traveling in.

Another attempt to test the 1.6700 level and eventually its break, could open the path towards the next possible area of support at 1.6638, marked by the low of the 3rd of October. If the bears won’t stop there, a further depreciation of the rate could lead to a test of the 1.6596 zone, which has acted as a very strong support level for GBP/CAD. The pair has been trading above that level since the 20th of October 2017.

Looking at our oscillators on the 4-hour chart, the RSI had a chance recently to push towards the 50 mark but failed and looks like it now it wants to get back into the oversold territory at around the 20 area. The MACD still remains in the negative zone. The indicator was trying to move north, but recently changed direction to the downside and is now testing the trigger line. Both indicators are showing us a somewhat more negative picture, which supports the above-discussed idea.

Alternatively, if GBP/CAD travels higher and breaks the aforementioned downside resistance line, this could be the first warning signal for the bears that the bulls are advancing. If the pair continues to push higher and breaks the 1.6833 hurdle, this is where we could get more comfortable with the upside scenario, at least for the near-term. The pair could then target the 1.6880 obstacle, which held the rate down on the 25th of October. If this time the obstacle won’t hold the bulls from pushing the pair further, GBP/CAD could easily test the 1.6925 resistance level, marked by the low of the 9th of October. Slightly above, lies another good potential area of resistance at 1.6963, which acted as good support on the 19th and the 23rd of October.

GBPCAD 4hour

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