GBPCAD Faces Key Resistance on Daily ChartThe GBPCAD currency pair has been in a strong uptrend in recent months, primarily due to the British pound appreciating against the Canadian dollar. This trend has propelled the price to around 1.8070, the highest level since 2020, where it encountered significant resistance.
After hitting this peak, the price reversed and broke a long-term uptrend line, subsequently retesting this area, which is now acting as resistance. Currently, the price is showing signs of potential rejection at the 50% Fibonacci retracement level (1.7812), indicating selling pressure.
It's important to note that the recent bearish movement (from October 30 to November 22) was notably stronger than the preceding bullish movement (from October 3 to October 30), suggesting that sellers have gained momentum after reaching the resistance level on the daily chart.
Potential Sell Trigger
If the price drops below the 1.7740 mark, it could activate a sell signal, indicating a new bearish phase. The technical setup supports this possibility because:
A drop below 1.7740 would negate the previous bullish candle on the daily chart.
The 50% Fibonacci level has already shown resistance, signaling price rejection.
Sell Opportunity:
Entry: If the price manages to close below the 1.7740 in the daily chart. A good entry point could be considered between 1.7740 and 1.7715, a range of 25 pips, maximum.
Stop Loss: Above the high of the previous candle, at around 1.7860.
Primary Target: Support area around 1.7475.
Secondary Target: Extension to 1.7313, which aligns with a historical support zone.
Alternative Bullish Scenario
Conversely, if the price breaks above the 61.8% Fibonacci retracement at 1.7891, it could suggest that buyers are regaining control, potentially allowing the pair to reclaim recent highs at 1.8070 and move higher.
Bullish Signals:
If the daily manages to close above 1.7891.
Sustained movement above dynamic resistance.
A Stop Loss could be placed at 1.7750.
Primary target would be around 1.8070, the daily chart resistance.
Summary
The GBPCAD is at a pivotal point; a break below 1.7740 could lead to a sharp decline, while a breakout above 1.7891 could resume the upward trend. The next direction will hinge on the strength of market participants and confirmation of these critical levels.
Disclaimer
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