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GBP/CAD trims losses after hitting 6-week low

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Jan 21, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
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    FXStreet (Córdoba) - Oil prices recovery sent the GBP/CAD cross down to a 6-week low of 2.200 on Thursday, as WTI crude oil futures bounced briefly above $30.00 a barrel, but the rally was tempered by US EIA report, which showed that US stockpiles rose by 4 million barrels, more than the forecast 2.8 million barrels expected.

    GBP/CAD bounced from lows and trimmed losses over the last hours to currently trade at 2.0329, still 1.2% lower on the day.

    GBP/CAD technical view

    “As for the technical picture, the 1 hour chart for the cross shows that the price has bounced over 100 pips from such low after the technical indicators reached extreme oversold readings, and are currently losing upward strength far below their mid-lines. In the same chart, the 20 SMA has accelerated its decline above the current price, acting as dynamic resistance around 2.0450”, said Valeria Bednarik, chief analyst at FXStreet. “In the 4 hours chart, the technical indicators are bouncing from oversold territory as well, but still far from suggesting further gains, while the price is far below its moving averages, having accelerated below the 200 EMA for the first time this year. The cross has recovered from a short lived slide below the 61.8% retracement of the latest bullish run at 2.0270, meaning that it will take a new leg lower below this level to confirm a bearish continuation for this Friday”.

    Support levels: 2.0270 2.0220 2.0180. Resistance levels: 2.0350 2.0400 2.0450.
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