GBPCAD is trending higher on its short-term time frame, moving inside a rising channel and gearing up for a test of support. Technical indicators are hinting at a continuation of the rally.

The 100 SMA just crossed above the 200 SMA to indicate that the path of least resistance is to the upside or that support is more likely to hold than to break. Price is finding some buyers at these dynamic inflection points, which happen to line up with the 50% Fib at 1.7967.

A larger correction could reach the channel support closer to the 61.8% Fib and 1.7900 major psychological level. If any of the Fibs are able to keep losses in check, GBPCAD could resume the climb to the swing high at 1.8175 or the channel top at 1.8200.

Stochastic is edging close to the oversold region to signal exhaustion among sellers, so turning higher would confirm that buyers are taking over. RSI has room to head south before indicating oversold conditions, but the oscillator appears to be bottoming out.

This pair could take its cues from the BOE decision, as the central bank is widely anticipated to hike interest rates by another 0.25% to battle inflation. A dovish hike, however, might mean some losses for the UK currency.

Meanwhile, the Loonie could be pushed around by crude oil prices, which have been tumbling upon seeing a surprise build in stockpiles. This suggests that demand could be on shaky ground, especially since global purchases could slow down due to another resurgence in COVID-19 cases among Asian nations.

China and South Korea have been reporting record daily case counts, leading many to worry that another wave of the pandemic could weigh on business activity and commodity demand later in the year.