We have a number of high profile UK events in full swing this week!
I am banking on big moves from the pound pairs, and I have a breakout and retest of GBP/CAD on my radar.
As you can see, the pair has already broken through the descending trend line to indicate that a reversal from the sell-off is in progress.
Forex GBP/CAD for 4 hours Planned by TV
A quick correction to nearby support areas may be required before more GBP bulls charge in.
An easy to use Fibonacci tool shows potential levels where buyers might be waiting to jump in. The 38.2% retracement level is already close at 1.6837, while the 50% Fibonacci level is near the key psychological handle at 1.6800.
The bigger correction might reach the area of interest which lines up with 61.8% Fibonacci and the previous trend line around 1.6750 as a minor psychological sign.
The 100 SMA is still below the 200 SMA for now, but the gap between the indicators is narrowing to hint at a possible bullish MA crossover.
There could be a bit more selling pressure while stochastic has room to head lower before reaching oversold territory. Then again, the oscillator has already started to go higher to indicate that the buyers are eager to take over.
I would probably wait for a release UK CPI figures To gauge over this week Bank of England statement It might turn and how the GBP/CAD could react. After all, another stronger than expected result could seal a deal for a hawkish announcement and an early rally for the pair.
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