GBP/CAD consolidates 200-dma breakout, minor weakness likely on break below 5-dma at 1.6917
- GBP/CAD consolidates 200-DMA breakout shown last week, bias still higher.
- The pair finds stiff resistance at 1.70 levels (trendline), break above will see further upside.
- Momentum studies are bullish. Weekly charts also support bias higher.
- Technical indicators on weekly charts also support upside in the pair. RSI and Stochs sharply higher, MACD shows bullish crossover.
- Price action has pierced into weekly cloud and is on track to test weekly 100-SMA at 1.7461.
- On the flipside, 5-DMA at 1.6918 is immediate support, minor weakness likely on break below.
- We see bullish invalidation only on break below 200-DMA at 1.6696.
- Focus will be on Canada August monthly GDP growth and Industrial Product Price Index ahead of the BoC Governor Poloz’s speech later in the day for further impetus.
Support levels – 1.6917 (5-DMA), 1.69, 1.6845 (50% Fib retracement of 1.7853 to 1.5837 fall)
Resistance levels – 1.70 (trendline), 1.7083 (61.8% Fib), 1.7120 (Nov 2016 high), 1.7461 (weekly 100-SMA)
Recommendation: Good to go long on breakout above 1.70, SL: 1.6910, TP: 1.7085/ 1.7120/ 1.72
FxWirePro Currency Strength Index: FxWirePro’s Hourly GBP Spot Index was at 69.9865 (Neutral), while Hourly CAD Spot Index was at 6.04745 (Neutral) at 0940 GMT.