Technical Analysis – GBPCAD enjoys another bullish breakout; will it be third time lucky for the bulls?
June 16, 2023 11:27 am
GBPCAD bulls are staging another upward breakout from the rectangle that has been affecting the price action since December 2022. They have already failed twice at decisively breaking this rectangle and recording a significant upleg above the 1.6862 area.
This time the technical picture appears to be slightly more supportive of the bulls’ intention. The Average Directional Movement Index (ADX) is stuck below its 25-threshold and essentially remains in waiting mode for the next trend. Interestingly, both the RSI and the stochastic oscillator appear to be sending bullish signals. Particularly the latter is moving aggressively higher and opening a sizeable gap from its moving average. This action tends to be an indication of underlying market strength.
Should the bulls feel more confident in their current endeavor, they would attempt a retest of the 1.7080 level defined by October-November 2021 highs. The early May 2023 rally was halted at this area, making it key for short-term sentiment. If 1.7080 is successfully broken, the bulls could then set their eyes higher and more specifically at the February 21, 2022 and August 20, 2021 highs at 1.7385 and 1.7624 respectively.
On the other hand, GBPCAD bears are trying to limit their losses and push the pair back inside the rectangle. The next key support stands at the busy 1.6589-1.6647 area that is set by multiple GBPCAD lows and the 100-day simple moving average (SMA). The path then appears to be clear until the key 1.6101-1.6284 area.
To sum up, GBPCAD bulls are keen on finally recording a sizeable rally above the recent rectangle. However, the real test of their resolve will come at the 1.7080 area.
GBPCAD bulls are staging another upward breakout from the rectangle that has been affecting the price action since December 2022. They have already failed twice at decisively breaking this rectangle and recording a significant upleg above the 1.6862 area.
This time the technical picture appears to be slightly more supportive of the bulls’ intention. The Average Directional Movement Index (ADX) is stuck below its 25-threshold and essentially remains in waiting mode for the next trend. Interestingly, both the RSI and the stochastic oscillator appear to be sending bullish signals. Particularly the latter is moving aggressively higher and opening a sizeable gap from its moving average. This action tends to be an indication of underlying market strength.
Should the bulls feel more confident in their current endeavor, they would attempt a retest of the 1.7080 level defined by October-November 2021 highs. The early May 2023 rally was halted at this area, making it key for short-term sentiment. If 1.7080 is successfully broken, the bulls could then set their eyes higher and more specifically at the February 21, 2022 and August 20, 2021 highs at 1.7385 and 1.7624 respectively.
On the other hand, GBPCAD bears are trying to limit their losses and push the pair back inside the rectangle. The next key support stands at the busy 1.6589-1.6647 area that is set by multiple GBPCAD lows and the 100-day simple moving average (SMA). The path then appears to be clear until the key 1.6101-1.6284 area.
To sum up, GBPCAD bulls are keen on finally recording a sizeable rally above the recent rectangle. However, the real test of their resolve will come at the 1.7080 area.
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