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Can the Bulls Thrust to 1.7587 on GBP/CAD?

January 7, 2021 at 5:44 by Dorin Rosu

The Great Britain pound versus the Canadian dollar currency pair seems to be under constant bearish pressure. Will the bulls hold up this time as well?

Long-term perspective

After falling beneath the 1.7567 level after defining the 1.7674 high, the price stopped at the 1.7261 low and, following the validation of 1.7567 as resistance by retracing sharply upon reaching it, then continued until the 1.6810 low.

From there, it started appreciating, taking the form of an ascending trend that extended until the 1.7496 high. From there, a new drop took place, as this is how the 1.6768 low got printed.

Nevertheless, from 1.6768, the quotation sprang until the 1.7483 high. This unfolding points out that the market is oscillating within an ample range, bounded by 1.7445 as resistance and 1.6868 as support.

Noteworthy is, when compared with the collapse from the vicinity of 1.7567 to 1.6810, the decline from 1.7496 to 1.6868 is less pronounced.

Similarly, the rise from 1.6768 to 1.7483 happened quicker than the one from 1.6810 to 1.7496. This could point out that the bears are losing steam, whereas the bulls are gaining traction.

So, if the bulls swiftly recover from beneath the intermediary level of 1.7285, they can challenge 1.7445, which, if conquered, opens the door to 1.7567.

On the other hand, if 1.7585 keeps its role as resistance, then a new fall towards 1.6868 is in the cards — with 1.7132 acting as the first objective.

Short-term perspective

From the 1.6768 low, as the series of higher highs and lows points out, an ascending trend came into being.

After stopping a hair away from the 1.7487 intermediary level, the price entered a consolidative phase just above 1.7244.

It then shifted under 1.7244, etching the 1.7195 low, which, aside from the ones that rest on 1.7244, conserves the series of higher lows.

So, if the bulls retake 1.7244, they can validate 1.7337 as support and head for 1.7487. If confirmed as support, 1.7487 paves the way to 1.7626. Still, if 1.7487 remains a resistance, then a rectangle with the support at 1.7244 may take shape, and since it is a continuation chart pattern preceded — in this case — by a rise, the expectations are to favor a rally.

Only if 1.7244 assists as a resistance level, then 1.7094 is the next stop.

Levels to keep an eye on:

D1: 1.7445 1.6868 1.7285 1.7567 1.7132
H4: 1.7244 1.7337 1.7487 1.7626 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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