GBP/CAD traded lower today, after it hit resistance near the 1.7285 hurdle yesterday. The pair has been trading within a sideways range between that zone and the 1.6975 support territory since January 30th and thus, we would consider the near-term outlook to be neutral for now. That said, bearing in mind that the latest slide was triggered after the rate tested the upper bound of the aforementioned sideways path, we see the case for some further declines within the range.
A clear dip below the 1.7140 level, marked by the inside swing high of February 13th, could confirm the case and may initially pave the way towards the low of February 18th, at around 1.7055. If that level fails to stop the pair from drifting lower, then we may experience extensions towards the lower end of the sideways range, which is at around 1.6975.
Shifting attention to our short-term oscillators, we see that the RSI topped within its above-70 zone, fell below 70, and now looks to be heading towards 50. The MACD, although above both its zero and trigger lines, has also topped and could fall back below its trigger soon. These indicators suggest that the recent upside momentum has faded and support the notion for some more declines within the range.
In order to start examining whether the outlook has turned from neutral to positive, we would like to see a decent recovery and a close above 1.7285. This could signal the upside exit out of the range and may initially pave the way towards 1.7380, a resistance marked by the high of January 30th, as well as the inside swing lows of January 24th and 25th. Another move higher, above 1.7380, may allow the bulls to put the 1.7480 territory on their radars.
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