GBP/CAD skyrockets to a 9-month high; positive risks not faded yet.
GBP/CAD has been skyrocketing over the last couple of days, with a bullish rally today towards a fresh nine-month high of 1.7721. The price violated the ascending channel to the upside, confirming the positive outlook and turning the 20- and 40-simple moving averages (SMAs) to the upside in the daily timeframe.
The technical indicators seem to be overbought as the RSI is flattening near the 70 level, while the MACD oscillator is still strengthening its momentum above the zero and trigger lines.
Immediate resistance to further gains would likely come from the 1.7770 barrier, which overlaps with the 200-SMA in the weekly timeframe, acting as a strong obstacle for the bulls. A jump above this hurdle would increase bullish speculation and the market could send investors towards the 1.7980 level, where it topped on April 2018.
If, however, the strong upside momentum was to lose steam and the pair reversed lower, support would initially come from 1.7530. Dropping below this area could take prices until the 23.6% Fibonacci retracement level of the up leg from 1.6590 to today’s peak of 1.7721. Failure to hold above this level would switch the focus to the downside until 1.7350.
In the more medium-term picture, the slightly bullish correction shifted to a stronger positive tendency and is likely to stay as long as prices remain well above the short-term SMAs.
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