This GBP pair has been trending higher for some time now and looks ready to test its long-term support area soon.
Is the uptrend still our friend in this case?
I take a look at these turning points that I am watching on the daily time frame.
GBP/CAD Daily Currency Pair Chart by TradingView
The UK economy is due to release a raft of high-profile reports this week, including the change in the number of people claiming unemployment benefits in July, the consumer price index and retail sales figures.
Can this data continue to support the continued rise in the GBP/CAD pair?
We should keep in mind that the oil-linked Canadian dollar has been fighting a tough battle these days, as renewed geopolitical tensions in the Middle East have kept commodity traders on edge about a global supply crunch.
Remember that directional biases and volatility in market prices are usually driven by fundamentals. If you haven’t done your homework on the GBP/CAD, it’s time to check out the economic calendar and stay up to date with the daily fundamental news!
The GBP/CAD pair is stalling at the 38.2% Fibonacci retracement level of its major rally seen on the long-term chart, with GBP bulls looking to take the pair back to its highs near the 1.7850 minor psychological mark from here.
The larger correction could still fall to the 50% Fibonacci level near S1 (1.7410), the dynamic turning point of the 100 simple moving average and a key psychological marker, while the 61.8% level could be the dividing line for the bullish pullback, as it also coincides with an area of importance.
Don’t forget that the 100 SMA is above the 200 SMA on the daily chart which indicates that bullish momentum is present and that these technical indicators may hold as dynamic support on dips.
Just watch for any break below the 200 SMA which is in line with the trend line that has been holding since September of last year, as this could mark the beginning of a major reversal!