GBPCAD broke below its head and shoulders neckline around the 1.8000 major psychological mark then bounced off support around the 1.7800 region. Price could be in for a retest of the former support near the Fib levels.

The 38.2% Fib is keeping gains in check around the 1.7945 mark so far, with the 50% Fib still at the 1.7987 mark and the 61.8% level at 1.8028 near the 100 SMA dynamic inflection point. If any of these hold as a ceiling, GBPCAD could resume the drop to the swing low or lower.

The 100 SMA is above the 200 SMA, though, so the path of least resistance is to the upside or support is more likely to hold than to break. In that case, GBPCAD could carry on with its climb to the swing high at 1.8164 or higher.

Stochastic is also on the move up and has some ground to cover before reaching the overbought zone to reflect exhaustion among buyers, so price could keep following suit. RSI is also heading up to show that buyers have the upper hand and has room to climb before indicating overbought conditions.

GBPCAD could take cues from Canada’s jobs data due later in the week since the U.K. economy has no major releases lined up. Expectations are for a slower pickup in hiring at 24.5K versus the earlier 50.5K increase, potentially keeping dovish BOC speculations in play.

Still, an upside surprise could mean upside for the Loonie, especially since the Canadian central bank signaled a slower pace of easing this year. The jobless rate is slated to hold steady at 6.8% for December. In addition, higher crude oil prices on account of looser policy expectations and stronger demand conditions could also mean upside for the correlated CAD.

Meanwhile, the BOE appears to be keeping its neutral bias, although the latest MPC minutes showed more members calling for a rate cut than expected.