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Bulls Back on GBP/CAD from 1.6868?

June 25, 2020 at 6:27 by Dorin Rosu

The Great Britain pound versus the Canadian dollar currency pair rejected the 1.6868 intermediary support level. Is this a valid bullish sign?

Long-term perspective

The appreciation that started at 1.6542 ended at the major 1.7567 resistance level, as the price was not able to make further gains after three consecutive attempts.

The resulting depreciation, although it got really close to reaching the solid support of 1.6724, lost its steam as it approached this level. This can be pointed out by the fact that the rising wedge was not able to produce a fall strong enough to pierce the 1.6724 level. On the contrary, once the price got close enough to the respective level, the bulls rejected the movement, sending the quotation above the intermediary level of 1.6868 and touching the double resistance made possible by the lower line of the wedge and the 1.6988 intermediary level.

In this context, the bulls just might have another try. To send the sign that they are the ones in control, they have to conquer the 1.6988 level. If they manage to do it, then the rising wedge would have been invalidated and they could eye 1.7132.

However, even if another downwards pointing leg does materialize, as long as the price oscillates above 1.6868, the bulls can still pull off an appreciation. But if the bears are able to send the price back to the low that sits close to the 1.6724 level, then the situation turns neutral.

Short-term perspective

The fall from the 1.7175 high extended to as low as 1.6750. From here, the market found support in the 1.6842 intermediary level, from where it managed to appreciate until the strong 1.6965 level. In doing so, it also made it possible for the 1.6750 low to be the starting point for an ascending trendline.

So, as long as the price oscillates above the trendline, the bulls are able to send the price above 1.6965, and from there to 1.7094.

However, if the 1.6965 level is validated as resistance, the bears could spell the piercing of the trendline, which makes it possible for the price to fall until 1.6842 and then to 1.6698.

Levels to keep an eye on:

D1: 1.6988 1.7132 1.6724
H4: 1.6965 1.7094 1.6842 1.6698

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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