GBPCAD Weekly Technical Outlook
On the monthly time frame, GBPCAD market operation is presently in a support zone which was rejected in October 2017. This zone is some pips above another support zone which the market rejected in October 2016, and may be attractive to bears. Furthermore, it should be noted that market operation rallied northwards from a congestion zone in September 2013 and its lower part, which is around 1.54930, may be a long-term target of bears.
On the weekly time frame, the market has been trading above a horizontal channel, 1.58820/1.66570, (bound by magenta horizontal lines) since mid-November 2017. In mid-June 2019, price action returned to the area and continued southwards within the channel. Since then there has been a bearish disposition of market in the zone, but with a decline in momentum. Price action retraced from the 1.58820 horizontal support zone three weeks ago and has continued northwards. Last week, the market printed a bearish candlestick with wicks on both ends, which indicates that bears are yet to take over market control. We may see further northward retracement but any retracement to a significant resistance, with a role flip, is likely to result in momentum for a southward continuation.
Price action on the daily time frame is presently operating in a rising channel (blue) in the context of a larger falling trend. This, technically, is a retracement as the market structure is still in favour of bears. Last Friday, the market printed an indecision candlestick around a minor horizontal support in confluence with the channel support. Technically, we may see further northward move to an area of value such as the channel resistance trendline or the immediate minor resistance around 1.64020/1.65370 (bound by black horizontal lines). This may extend to a retest of the 1.66570 area, which price action broke down a few weeks back; as observed on the weekly time frame. This will be a corrective move and will potentially give way to a southward turnaround.
I hold a bearish bias on this pair upon a short-term bullish pullback.
I may be wrong. Trade safe and prosper.