GBPCAD Bullish At Six-Week Highs, Indicators Remain Positive

Technical analysis of Forex market

GBPCAD has gained this week but it managed to still hold within the Ichimoku cloud in the daily timeframe. The price ran to a fresh six-week peak today at 1.7376, climbing above 1.7340, which is the 23.6% Fibonacci retracement level of the upward wave from 1.5875 to 1.7790, following the rebound off the six-month uptrend line.

The technical indicators are feeding prospects of a possibly more aggressive positive tendency; the RSI holds well above 50, while the MACD continues to strengthen in bullish territory and above its red trigger line. Also, in the Ichimoku indicators, the red Tenkan-sen keeps rising above the blue Kijun-sen.

If 1.7340 proves easy to get through, the spotlight will turn to the 1.7725 area, reached on May 2019. On top of that, the bulls would need to clear the nine-month high of 1.7790 to push the rally to post a new ten-month high.

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A failure to overcome the nearby resistance could send the price down to 1.7300 before flirting with the 40- and 20-day simple moving averages (SMAs) at 1.7165 and 1.7105 respectively. Lower, support could be next found around the 38.2% Fibo of 1.7060, which encapsulates the rising trend line, while a decisive close below these levels could stage a steeper sell-off towards 1.6920, creating a neutral bias in the short-term.

In the medium-term picture, the pair is still increasingly bullish as long as it holds above the short-term moving averages, and more importantly above the ascending trend line.