GBPCAD Builds Base around 50.0% Fibonacci; Remains in Upward Range

Technical analysis of Forex market

GBPCAD hit the 1.6970 support again following last week’s pullback from the 1.7270 resistance level, slipping below the 20-and 40-simple moving averages (SMAs) in the daily timeframe. The pair has been trading within an ascending sloping channel over the last six months, despite the upside spikes towards 1.7530. The short-term bias looks negative as the MACD keeps losing ground below its red trigger line, while the RSI seems to be making its way down below its 50-neutral mark.

Should the pair extend declines below the 1.6970 and the 61.8% Fibonacci retracement level of the upleg from 1.6580 to 1.7530, it could hit the uptrend line of the upward range around 1.6830. Below that, the focus could shift straight to 1.6755, switching the medium-term bullish bias to bearish.

On the upside, resistance could occur around the 50.0% Fibonacci of 1.7060 before touching the 40- and then the 20-SMAs at 1.7140 and 1.7190 respectively. Also, the 38.2% Fibonacci of 1.7170 stands between the moving averages, possibly acting as a strong resistance obstacle as well. Higher still, the next resistance could come from the 1.7270 barrier.

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Concluding, the medium-term picture continues to look predominantly bullish with trading activity remaining within the upward sloping channel.

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