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First Bullish Attempt on GBP/CAD Fails at 1.6988

June 2, 2020 at 7:48 by Dorin Rosu

The Great Britain pound versus the Canadian dollar currency pair is maintaining its descending course. Are the bears back for good, at least from the medium-term perspective?

Long-term perspective

The rally that started from the 1.6542 low got limited by the 1.7567 leading resistance level, as any other partially succeeded attempts to pass it was taken care of by the 1.7705 intermediary level.

Even if the bulls did not give up after the first defeat, as the 1.7285 level serves as a support for the flat in which the two parties fueled their disputes, the buyers and sellers, respectively, the outcome favored the bears.

So, after the support level of 1.7288 was pierced, the bears head for their next target, the double support crafter by the 1.7132 level and the ascending trendline that starts from the 1.6725 low.

They passed that area as well, and the next possible support, represented by 1.6988, was eclipsed quite quickly, as the bears extended until the 1.6868 intermediary level.

An interesting development was that, after bouncing from 1.6868, the price got above 1.6988 and even extended until 1.7132, but was not able to maintain its position above the just regained 1.6988 zone.

So, if the bulls do manage to conquer 1.6988, then they could head for 1.7132 and even consider conquering it as well.

However, if 1.6988 limits any further movements to the upside, then 1.6868 may be destined to serve only as a temporary support. In this case, the bears will reach their main objective, 1.6724.

Short-term perspective

The descending trend that started from 1.7704 seems to have paused after the descending trendline was pierced, following the confirmation of the key 1.6965 support level.

But the support was eventually pierced and the defensive bullish reaction — marked by the 1.7120 peak — was close to nothing, as not only that it did not make a new higher high considering the 1.7132 high, but it also let the price slip one more under the main support, 1.6965.

As a result, if the bears accomplish to confirm 1.6965 as resistance, then they could aim for 1.6842 and then 1.6698, the latter being another key level.

If the bulls get the resources to send the price above 1.6965 and confirm it as support, then they could hope for another visit to 1.7094, but they should bear in mind that it is a massively bearish defended area.

Levels to keep an eye on:

D1: 1.6988 1.7132 1.6868 1.6724
H4: 1.6965 1.6842 1.6698 1.7094

If you have any questions, comments, or opinions regarding the Technical Analysis, feel free to post them using the commentary form below.

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