More upside potential: GBP/CAD technical analysis
GBP/CAD technical analysis points a coming retest of the 1.7500 resistance level. The presence of bullish MACD price divergence is signalling more short-term upside.
The GBP/CAD pair has recently started to firm above the 1.7000 level, following a swift pullback from the 1.7800 resistance level.
GBP/CAD technical analysis shows that bulls may start to target the 1.7500 resistance level if the 1.7000 support level continues to hold.
GBP/CAD medium-term price trend
GBP/CAD analysis shows that the pair is technically bullish and has been trading above its key 200-day moving average since October last year.
The pair has seen some wild moves over recent days, with the British pound falling over Brexit head and the Canadian dollar tumbling over falling oil prices.
Furthermore, oil prices appear to be primed for further declines, which will likely place the Canadian dollar under more selling pressure.
The daily time frame shows no clear pattern at present. However, the prevailing trend remains bullish so it appears likely that GBP/CAD bulls may target the 1.7500 to 1.7660 level area if critical support continues to hold.
Any pullback in the pair towards the 1.7100 to 1.7055 region may be seen as a great dip-buying opportunity by GBP/CAD bulls.
GBP/CAD short-term price trend
GBP/CAD analysis shows that the pair is bullish over the short term while price trades above the 1.7120 support level.
The main focus for traders over recent weeks has been the complex head-and-shoulders pattern on the lower time frames, which holds a substantial downside projection.
At present, the large head-and-shoulders pattern appears to be forming yet another right-hand shoulder.
Traders should note that the neckline of the pattern is located around the 1.6700 level.
It is still possible that the upside in the GBP/CAD pair is not finished, due to large amounts of bullish MACD price divergence on the lower time frames.
GBP/CAD technical summary
The positive MACD divergence extends towards the 1.7400 level and could soon be quickly unwound.
GBP/CAD analysis suggests that the pair could rally back towards the 1.7500 technical region if the 1.7000 support level continues to hold firm. Bullish MACD divergence is also present on the lower time frames.