GBPCAD Long-Term Bullish Channel Correction

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GBPCAD is trading inside an ascending channel on its daily time frame and is currently testing the top. Price could be due for a pullback from here, possibly until the nearby Fibonacci retracement levels.

The 100 SMA is above the longer-term 200 SMA to confirm that the path of least resistance is to the upside. In other words, the uptrend is more likely to gain traction than to reverse. The 200 SMA lines up with the bottom of the channel to add to its strength as a floor and might be the line in the sand for a pullback.

The 100 SMA is closer to the 61.8% Fib at the 1.7300 handle that might also be enough to keep losses in check. The 50% level is closer to the mid-channel area of interest while the 38.2% Fib might be enough to hold as support in a shallow retracement. If any of these Fibs hold, price could make its way back up to the swing high at 1.7800 and channel top.

RSI is pointing down, though, indicating that sellers have the upper hand and might have more momentum to keep the pullback going. Stochastic is just making its way down from the oversold region to signal a return in selling pressure as well. A break below the 1.7200 mark could signal that a reversal is due while a rally past 1.7800 could spur a steeper climb.

GBPCAD Long-Term Bullish Channel Correction

The pound has been tossing and turning lately on account of Brexit developments as MPs are keen to avoid a no-deal scenario but have voted against the transition deal offered. An extension is likely and this would probably be announced during this week’s EU summit.

Meanwhile, the Loonie is drawing support from stronger crude oil prices as more factors are weighing on domestic and global supply while the low interest rate environment is likely to keep demand supported.

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