GBPCAD at this time is challenging the 1.6960 level – a support where the pair had consolidated after a decline from the nine-month high of 1.7790 – where the supportive trendline, drawn from the low on 3 September 2019 presently resides. The push down seems to be aided by strengthening negative momentum and the bearish crossover of the 50-day simple moving average (SMA) by the 20-day one.
The short-term oscillators suggest negative momentum is picking up. The MACD, is declining below its red trigger line in the negative zone, while the RSI in the bearish region, is dipping to test the previous low. However, the bullish overlap of the 200-day SMA by the 100-day one, may warrant some caution, as it could assist in the supportive trendline holding for a move back up or an adoption of a sideways market as the MA’s converge.
If buyers retake control, initially the 1.7059 level, which is the 38.2% Fibonacci retracement of the up leg from 1.5874 to 1.7790, could apply downside pressure ahead of the tougher resistance point of 1.7130, where the bearish crossover lies. Overhead nearby, the 1.7212 swing high could curb further rallies towards the 23.6% Fibo of 1.7338 and 1.7485 resistance ahead of the peaks.
If sellers manage to steer below the 1.6960 low and supportive trendline, the fortified area from 1.6833 to 1.6800 – involving the 50.0% Fibo and bullish overlap of the 200-day SMA – could halt declines from reaching the 1.6723 trough and 1.6700 handle.
Overall, the very short-term bias looks bearish and a break below the supportive trendline would reinforce it, while a move below 1.6700 would need to occur to throw into question the bigger positive picture.
