GBPCAD Weekly Technical Outlook
After a drop from the high of December 2015 to the low of September 2016 and its 38.2 Fib retracement, which happened in April 2017, the pair has been on a southward move on the monthly time frame since May 2017.
On the weekly time frame, the pair is respeting a resistance trendline (forest green colour) from the high of January 2016. Besides, an inner resistance trendline from the high of May 2017 has developed, (chocolate colour) which indicates an increased southward momentum. Last week, a relatively strong bearish candlestick formed, which rejected the monthly central pivot southward and pierced a strong support zone around the 1.62300 area. This candlestick appeared to be a follow through of the bullish rejection candlestick (or bearish pinbar) formed three weeks ago. Should sellers maintain control of the order flow, a likely target is the 1.59760 area.
On the daily time frame, the pair has been consolidating in an area that has served as a strong S/R zone for quite some time (represented in khaki coloured rectangle, bound by magenta coloured horizontal lines). The most recent price action on Friday pierced the area southward but we may expect a pullback to an area of value, perhaps to around the 1.63950 area, before any bearish continuation/follow through. Should a bearish follow through fail, we may see price action move further northward towards the distal part of the range, probably to around the 50/61.8 Fib retracement zone (between 1.64000 and 1.64980) of the drop from the swing high of August 3 to the low of August 18. This may be limited by the minor resistance line (navy coloured), as it is near the most immediate area of value technically. The H4 time frame provides a clearer picture of this possibility.
I may be wrong. Trade safe and prosper.