GBP/CAD has been in a downtrend since the pair turned south on the 19th of March. Even though it managed to regain some lost grounds in the end of May, still the recovery was not enough to convince the bulls that it is time to jump in. The pair is currently testing from underneath the mid-term downwards moving trendline, taken from the high of 26th of March. Until that trendline is broken, we will remain somewhat more bearish rather than bullish.
A strong move and eventually a break of the 1.7315 level, that was yesterday’s low, could initiate some more selling and GBP/CAD could drop to 1.7250 or even slightly lower, to the 1.7200 mark. If the rate continues to fall, the bears will be more than happy to drive the pair towards the next key area of support of 1.7135. Slightly below that, near the 1.7055 level, lies the lowest point of May, which could be seen as a potential area for a test as well.
Alternatively, if the aforementioned mid-term trendline gets violated and we see a strong push through that line, then finally the bulls will have a chance to redeem themselves and drive GBP/CAD towards previous key resistance levels. If the pair easily pierces through the 1.7435 and the 1.7475 levels, then we would expect to see more bulls joining in the action and moving GBP/CAD higher. The next potential zones of resistance to keep an eye on could be the 1.7570 and 1.7625 levels.
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