GBPCAD came back swinging after its January retreat as the bearish forces appeared to run out of steam. Moreover, the pair crossed above both its 50- and 200-day simple moving averages (SMAs), while the latter also rejected a temporary minor pullback, endorsing the bulls’ hopes for a more sustained uptrend.
The momentum indicators suggest that the near-term risks are tilted to the upside. The MACD is found above both zero and its red trigger line, while the RSI is ticking upwards in the positive territory.
Should the bulls maintain control, the price might ascend towards 1.7310, which has rejected several price advances in the last few months. Further upside pressure could send the price to test the 1.7420 barrier. Crossing above this region, the spotlight could turn to 1.7555, a level which the price has failed to close above since April 2021.
Otherwise, if selling pressure intensifies, the pair may encounter initial support at the 1.7140 obstacle, which overlaps with the 200-day SMA. Failing to halt there, the price might dip towards 1.7035 before it challenges the 1.6950 hurdle. A decisive move below the latter could pave the way towards the 1.6835 region.
To summarize, although the resumption of GBPCAD’s short-term upside trajectory remains the most likely scenario, the long-term outlook remains bearish. Therefore, a profound break above the 1.7555 ceiling is needed to alter the long-term picture back to positive.
