GBP/CAD Testing Key Support: Can the Uptrend Hold?
GBP/CAD has been riding a rising trend line in recent weeks, but it seems like another dip toward support may be in the works. The key question now is whether the uptrend can stay intact.
Let’s dive into the 4-hour chart for a closer analysis.
GBP/CAD 4-Hour Analysis
Crude oil prices have surged recently, strengthening the Canadian dollar (Loonie) and pulling GBP/CAD down from its highs near the 1.8100 mark. The pair is now hovering around its 50% Fibonacci retracement level, just above S2 (1.7890), and could potentially dip further toward the rising trend line that has provided support over the last couple of months.
The critical question now: Will this support level hold, or is a breakdown imminent?
Technical Overview:
- Fibonacci Levels: GBP/CAD is testing the 50% Fibonacci retracement level, but a deeper correction to the 61.8% Fib level, near the rising trend line, could be possible. This area aligns with the 200 SMA, which adds strength to this potential support zone.
- Moving Averages: The 100 SMA is still above the 200 SMA, signaling that the uptrend remains intact for now, and a rebound from support could be likely.
However, should support fail, a deeper decline may follow, with potential downside targets around S4 (1.7770) and S5 (1.7710), near previous swing lows.
Fundamental Factors:
Keep in mind that market direction and volatility are often influenced by fundamental drivers. It's essential to stay updated on key economic events affecting the British pound and Canadian dollar. Additionally, monitor developments from the ongoing OPEC-JMMC meeting, as any updates regarding crude oil production could impact oil prices and, in turn, the oil-correlated Canadian dollar.
In summary, GBP/CAD remains in an uptrend for now, but a break of the trend line support could lead to a deeper correction. Keep a close watch on fundamental news and technical levels to gauge the next move for the pair.
