GBPCAD broke above its falling trend line that’s been holding since early May, suggesting that an uptrend could be in the works. Price has yet to complete its retest of the former resistance before resuming the climb.

The Fibonacci retracement tool shows nearby potential support areas. The 38.2% Fib is at 1.6840, then the 50% level is near the 1.6800 handle. A larger correction could reach the 61.8% Fib that coincides with the broken trend line and 1.6750 minor psychological level.

If any of these hold as support, GBPCAD could resume the climb to the swing high near the 1.7000 major psychological resistance and beyond.

Although the 100 SMA is below the 200 SMA, the gap between the moving averages is narrowing to point to a possible bullish crossover. Also, the pair is trading above both indicators, so these could hold as dynamic support on dips.

Stochastic hasn’t quite reached the oversold region just yet, but the oscillator is already starting to bottom out and might be ready to turn higher. In that case, bullish pressure could pick up and lead to a continuation of the rally.

RSI has more room to head south before reflecting oversold conditions, though, so selling pressure could stay in play until it does.

The UK economy is set to print its May CPI report later today and might signal another dip in inflation. However, another stronger than expected result could point to sticky price pressures and the risk of a wage price spiral, upping the odds for a more hawkish BOE announcement.

The central bank is widely expected to announce another increase in borrowing costs, but some are pricing in the possibility of a larger 0.50% hike or more policymakers voting for a tightening move than before.

Meanwhile, the BOC is also in the middle of a tightening cycle and has recently resumed its rate hikes.