GBP/CAD 4H Chart: Channel Down

Source: Dukascopy Bank SA
© Dukascopy Bank SA
The main argument in favour of our bearish outlook on GBP/CAD is the fact that the currency pair broke the three-year trend-line to the downside in mid-February. Since then, the Sterling has been forming a descending channel, and we expect the currency to keep ceding ground relative to the Canadian Dollar. Pound's depreciation is also implied by the technical indicators in all three relevant time-frames. In the near-term, however, the price could rise, considering that it is fluctuating near the lower boundary of the pattern. Nevertheless, the upside should be limited by the resistance trend-line at 1.8530. At the same time, the Sterling is still overbought—65% of positions open in the SWFX market are long.
© Dukascopy Bank SA
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