After breaking the downside resistance line, taken from the peak of the 22nd of June, GBP/CAD has entered a range between the 1.6950 and 1.7175 levels. Until the pair breaks out of it, it is difficult to understand which direction exactly, GBP will move against the CAD in the foreseeable future.
Certainly, for now, we will stay put and wait for the confirmation break. If GBP/CAD eventually decides to break through the upper side of the range, then this could wake up the bulls and we could see the pair getting lifted to the 1.7220 zone, marked by the high of the 26th of July. Further acceleration of the rate may lead to a test of the 1.7315 area, which was the peak of the 25th of July. If the bulls remain in control, then we could see GBP/CAD climbing higher to the 1.7410 hurdle that held the rate from moving higher on the 17th of July.
On the downside, a break below the lower bound of the range, which is at 1.6950, could turn the short-term outlook negative and more bears could see this as a good opportunity to jump in. This could lead GBP/CAD towards the 1.6865 barrier, which was the low of the 5th of September, a break of which could pull the pair even lower. The next potential support zone to monitor could be the 1.6795 level, marked by the lows of the 3rd of September and the 30th of August.
The RSI and the MACD currently appear to be somewhat bearish, but it is still too early to say that the downside momentum will be maintained. The RSI is slightly below 50, but is pointing a bit to the upside. The MACD is running at the zero line and also coincides with the trigger line.
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