GBPCAD once again got rejected on its test of the ascending channel top, which means that a pullback to support may be due. Applying the Fibonacci retracement tool shows where buyers might be waiting.

The pair is currently testing the mid-channel area of interest that lines up with the 50% retracement level and 200 SMA dynamic inflection point. A larger correction could last until the 61.8% level at the 1.7058 mark or the very bottom of the channel closer to 1.6800.

The 100 SMA is above the longer-term 200 SMA to confirm that the path of least resistance is to the upside. This confirms that the climb is more likely to resume than to reverse. However, price might be dipping below both moving averages as an indication of increased bearish pressure.

Stochastic is already indicating oversold conditions or that sellers are exhausted. A bullish divergence can also be seen since the oscillator made lower lows while price had higher lows. Similarly RSI is in the oversold region and looks ready to turn higher and move north, so GBPCAD might follow suit as buyers return.

Brexit troubles now seem to be weighing on the pound as weeks have gone by without much progress. PM May is headed to Brussels to get more concessions from EU officials on the Irish border backstop, but this is an issue that leaders have already refused to budge on. Being unable to push the amendments could put the UK closer to a hard Brexit as parliament rejected the earlier version of the agreement.

Meanwhile, the Loonie is enjoying a lot of support from upbeat Canadian data and higher crude oil prices. OPEC output cuts and the sanctions on Venezuela already appear to be dampening global supply while easing trade tensions and the prospect of low US borrowing costs for much longer are simultaneously lifting prices.