I anticipate significant changes from the pound pairings, and I have this break-and-retest bet on the GBP/CAD on my radar.
As you can see, the pair has already broken through its declining trend line, suggesting that the selloff is about to reverse itself.
However, before more pound bulls charge, there might need to be a swift adjustment to the neighboring support zones.
The helpful Fib tool displays possible levels where buyers might be waiting to enter the market. The 50% Fib is close to the 1.6800 big psychological mark, while the 38.2% retracement level is also nearby at 1.6837.
Around the 1.6750 minor psychological level, a larger correction can hit the area of importance that corresponds with the 61.8% Fib and old trend line.
Although the 100 SMA is now below the 200 SMA, the distance between the two indicators is closing, suggesting that a bullish moving average crossing is likely to occur soon.
While Stochastic has room to fall before reaching the oversold level, there may be a little more selling pressure in the market. On the other hand, the oscillator is already beginning to move upward, which may indicate that buyers are keen to seize control.
To predict how this week's BOE statement would go and how GBP/CAD might respond, I'd probably wait till the U.K. CPI statistics were out. After all, a second result that is stronger than anticipated might guarantee a hawkish statement and an immediate surge for the pair.
