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GBP/CAD reverses early gains

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Jan 18, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    FXStreet (Córdoba) - The GBP/CAD cross started the week gapping higher as crude oil prices plummeted to fresh 12-year lows on news economic sanctions against Iran were lifted, allowing the country to return to the international oil market, and therefore fueling concerns over a continued supply glut.

    Brent oil fell as low as $27.67 a barrel, while WTI was down to $28.35. Despite bouncing, both benchmarks held below $30.00 by the end of the day, indicating further slides are likely, despite the commodity remains extremely oversold.

    GBP/CAD however, erased most of its intraday gains, as the pound isn’t doing that well either. At time of writing, GBP/CAD is trading at 2.0729, 0.39% below its opening price.

    GBP/CAD technical perspective

    “The cross managed to hold above the 2.0690 Fibonacci support, and the intraday picture maintains a slightly positive tone, as in the 4 hours chart, the price hovers around a bullish 20 SMA, while the technical indicators aim slightly higher above their mid-lines”, said Valeria Bednarik, chief analyst at FXStreet. “The rally needs now to extend beyond the daily high at 2.0810, to confirm a more sustainable advance, back to the 2.0950 region tested at the beginning of December 2015.”

    Support levels: 2.0690 2.0630 2.0580. Resistance levels: 2.0760 2.0810 2.0870.
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