GBPCAD has recently bounced back above the 50-day simple moving average (SMA) following a 2% correction in June. This correction led the price below the SMA, towards the upper ascending trendline that has been intact since the fall of 2023. While momentum indicators are showing positivity again, there are hints that the uptrend may be losing steam. The %K line of the stochastic oscillator seems to be slowing its ascent, even though it remains aligned with the %D line. The MACD has been making marginal gains but has not yet turned positive or crossed above its red signal line.
The 20-day SMA is the next obstacle for the bullish momentum to overcome, located near the 1.7400 level. Reaching and breaking above this resistance would shift focus towards the 1.7500 level and subsequently the June peak at 1.7603. However, if the bears take control, the 50-day SMA around 1.7319 is expected to provide support before testing the upper ascending trendline. If this trendline is breached, the path may open up towards the 61.8% Fibonacci retracement level at 1.7159. Additionally, the lower ascending trendline, close to the 200-day SMA, might halt further declines.
While the longer-term bullish outlook remains unchanged after the recent sell-off, the immediate rebound appears to be on shaky ground. The strength of the bounce is yet to be confirmed, and the sustainability of the uptrend is uncertain. Traders and investors in GBPCAD are advised to proceed with caution and closely monitor key levels and indicators for a clearer market direction.