GBP/USD started a fresh rally above the 1.4000 resistance. USD/CAD declined heavily below 1.2250 and it remains at a risk of more downsides.
Important Takeaways for GBP/USD and USD/CAD
- The British Pound started a fresh increase from the 1.3800 support zone.
- There was a break above a major contracting triangle with resistance near 1.3925 on the hourly chart of GBP/USD.
- USD/CAD declined heavily after it broke the 1.2260 and 1.2250 support levels.
- There is a key bearish trend line forming with resistance near 1.2200 on the hourly chart.
GBP/USD Technical Analysis
This past week, the British Pound consolidated above the 1.3820 and 1.3850 support levels against the US Dollar. Recently, the US NFP report was released, which posted a disappointing result of 266K.
As a result, the GBP/USD pair started a fresh increase and cleared a couple of important hurdles near the 1.3925 level. There was also a break above a major contracting triangle with resistance near 1.3925 on the hourly chart of GBP/USD.
The pair even climbed above the 1.4000 level and settled nicely above the 50 hourly simple moving average. It traded as high as 1.4045 on FXOpen and it is now consolidating gains.
An initial support on the downside is near the 1.4000 level. It is close to the 23.6% Fib retracement level of the upward move from the 1.3856 low to 1.4045 high. If the pair fails to stay above the 1.4000 level, it could correct lower towards the 1.3950 level.
The 50% Fib retracement level of the upward move from the 1.3856 low to 1.4045 high is also near 1.3950. Any more losses might call for a test of the 1.3925 support.
On the upside, the 1.4050 zone is an initial barrier for the bulls. A successful close above the 1.4045 and 1.4050 levels could open the doors for a steady increase towards 1.4120 or even 1.4200.
USD/CAD Technical Analysis
The US Dollar started a major decline after it failed to clear the 1.2350 resistance zone against the Canadian Dollar. The USD/CAD pair broke many supports near the 1.2300 and 1.2250 levels.
There was also a break below the 1.2200 support zone and close below the 50 hourly simple moving average. The pair traded as low as 1.2110 and it is now consolidating losses.
An initial resistance on the upside is near the 1.2165 level. It is near the 23.6% Fib retracement level of the recent decline from the 1.2351 high to 1.2110 low. The first major resistance is near the 1.2190 level and the 50 hourly simple moving average.
There is also a key bearish trend line forming with resistance near 1.2200 on the hourly chart. The trend line is near the 38.2% Fib retracement level of the recent decline from the 1.2351 high to 1.2110 low.
Any more gains could lead the pair towards the 1.2250 resistance (the previous support). If not, there is a risk of a fresh decline from the 1.2110 low.
An initial support is near the 1.2100 level. The next major support could be 1.2050, below which the USD/CAD pair could decline towards the 1.2000 handle in the near term. An intermediate support may possibly be near the 1.2020 level.
This forecast represents FXOpen Markets Limited opinion only, it should not be construed as an offer, invitation or recommendation in respect to FXOpen Markets Limited products and services or as financial advice.