GBP/CAD is approaching a key inflection point after finding support earlier this month.
Will the broken support level serve as resistance this time?
We’re checkin’ out the pair’s 4-hour chart!
GBP/CAD 4-hour Forex Chart by TradingView
Traders backed away from risk on Thursday as worries over U.S. growth and the government shutdown talk dragged on. That meant selling currencies tied to commodities, including the oil-linked Canadian dollar.
The British pound took hits, too. The Bank of England (BOE) kept rates steady in November, but the vote was tighter than anyone expected, which basically told the market that a December rate cut is imminent.
With Canada dropping its labor market data later today, traders may find opportunities to trade the two high-beta assets.
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your fundie homework on the Canadian dollar and the British pound, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
GBP CAD bounced sharply after hovering near the 1.8370 support area earlier this week and has now climbed toward the 1.8525 zone.
After the upswing, we’re now keeping close tabs on the 1.8550 – 1.8650 area. See, this zone lines up with key Fibonacci retracement levels from the late October pullback and also sits close to the 100 SMA. It is also only slightly below the long-term trend line support that GBP/CAD recently broke, which could now act as resistance.
If we start seeing bearish candlesticks and consistent trading below 1.8550, that could signal that sellers are back in control. In that case, the pair may return to the previous swing low near 1.8370, or even explore new lows for the month.
If buyers keep pushing, though, a break above that resistance zone could send GBP/CAD toward the 1.8700-1.8800 area and potentially reconnect with the broader uptrend in place a few weeks ago.
Whichever bias you end up trading, don’t forget to practice proper risk management and stay aware of top-tier catalysts that could influence overall market sentiment.
Disclaimer:
Please be aware that the technical analysis content provided herein is for informational and educational purposes only. It should not be construed as trading advice or a suggestion of any specific directional bias. Technical analysis is just one aspect of a comprehensive trading strategy. The technical setups discussed are intended to highlight potential areas of interest that other traders may be observing. Ultimately, all trading decisions, risk management strategies, and their resulting outcomes are the sole responsibility of each individual trader. Please trade responsibly.
