GBP/CAD traded sharply higher today, breaking above the downside resistance line drawn from the peak of March 10th. However, that rate still stays within the consolidative zone that has been containing most of the price action since March 18th. That area is between the 1.6610 and 1.7020 barriers. Although there are decent chances for some further advances, we would stay neutral for now and we would start looking north as soon as the upper bound of that consolidative zone gets broken.
Such a break may wake up more bulls, who could decide to climb towards the high of March 18th, at around 1.7255. They may decide to take a break after reaching that zone, thereby allowing a small retreat. However, as long as such a retreat stays limited above the 1.7020 hurdle, we would expect buyers to recharge and shoot again. This time, they may breach the 1.7255 level and perhaps put the 1.7430 obstacle on their radars. That barrier is marked as a resistance by a small intraday swing high formed on March 13th.
Taking a look at our short-term oscillators, we see that the RSI has just poked its nose above 50, while the MACD, already above its trigger line, looks to be heading towards zero. It could gain a positive sign soon. These indicators suggest that the pair may soon start picking the necessary upside momentum for overcoming the 1.7020 barrier.
On the downside, a dip back below 1.6915 may signal that traders want to keep this exchange rate range-bound for a while more. Initially, we could see a slide towards the 1.6730 level, marked by today’s low, the break of which may encourage some sellers to challenge yesterday’s low, at 1.6610, which is also the lower end of the pre-mentioned trendless zone.
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