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GBP/CAD hovers near 11-month low

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Apr 7, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    The GBP/CAD cross extended its decline further on Thursday, reaching a fresh 11-month low of 1.8375, weighed by Pound's self-weakness, although it recovered ground during the American session as the loonie weakened in tandem with oil.

    However, with the bounce capped by the 1.8575 zone, GBP/CAD pulled back and closed the day with a slight loss.

    GBP/CAD technical view

    “The daily candle has posted a lower low and a lower high, indicating the downward potential is still strong. Also, the 20 DMA has accelerated its decline well above the current level, and the dynamic resistance level is now at 1.8670,” said Valeria Bednarik, chief analyst at FXStreet. “Shorter term, the 1 hour chart shows that the price is a few pips above a horizontal 20 SMA, while the technical indicators have turned lower, and the RSI is already below its 50 level, suggesting the cross is poised to extend its decline. In the 4 hours chart, the 20 SMA capped the upside on the early attempt to advance, whilst the technical indicators have been moving back and forth within negative territory, and currently lack directional strength. Nevertheless, renewed selling pressure below the 1.8440 region should lead to a continued decline towards fresh lows near the 1.8300 level.”

    Support levels: 1.8440 1.8375 1.8320. Resistance levels: 1.8500 1.8560 1.8610.
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