GBP/USD Could Extend Correction, USD/CAD May Dip Slightly

GBP/USD gained a lot of momentum recently and tested the 1.3000 resistance area. USD/CAD is currently consolidating, but it may start a fresh upward move after a tiny downside correction.

Important Takeaways for GBP/USD and USD/CAD

  • The British Pound rallied recently above the 1.2800 and 1.2920 resistance levels.
  • Recently, there was a downside correction below a major bullish trend line with support at 1.2885 on the hourly chart of GBP/USD.
  • USD/CAD is trading nicely above the 1.3250 and 1.3240 support levels.
  • There is a breakout pattern formed with resistance at 1.3275 on the hourly chart.

GBP/USD Technical Analysis

The British Pound found started a sharp upward move from the 1.2700 support area against the US Dollar. The GBP/USD pair traded above the 1.2800, 1.2850 and 1.2920 resistance levels.

The upward move was strong as the pair even broke the 1.2950 resistance and tested the 1.3000 resistance. A high was formed at 1.3000 on FXOpen and later the pair started a downside correction.

GBP/USD Technical Analysis British Pound Cable Chart

It declined below the 1.2950 support, the 50 hourly simple moving average, and a major bullish trend line with support at 1.2885 on the hourly chart of GBP/USD. Moreover, sellers pushed the pair below the 1.2900 support and a low was formed at 1.2847.

The pair is currently consolidating losses above the 1.2850 level, with an immediate resistance at 1.2880. The 23.6% Fib retracement level of the last decline from the 1.3000 high to 1.2847 low is also near the 1.2880 level.

However, the main resistance is near the 1.2920 and 1.2930 levels. The 50 hourly simple moving average is also positioned near the 1.2920 level plus the 50% Fib retracement level of the last decline from the 1.3000 high to 1.2847 low.

Therefore, if there is an upside correction, the pair is likely to test the 1.2900 and 1.2920 resistance levels. However, there is a risk of more losses towards the 1.2800 support level in the near term.

USD/CAD Technical Analysis

The US Dollar traded higher slow and steadily above the 1.3250 resistance area against the Canadian Dollar. The USD/CAD pair even broke the 1.3280 resistance area to move into a bullish zone.

Recently, the pair climbed above the 1.3300 level and the 50 hourly simple moving average. A high was formed at 1.3318 and later the pair started a downside correction. It declined below the 1.3250 support and the 50 hourly SMA.

USD/CAD Technical Analysis Loonie Chart

A low was formed at 1.3232 and the pair is currently trading above 1.3250. It seems like there is a breakout pattern formed with resistance at 1.3275 on the hourly chart.

The triangle resistance coincides with the 50% Fib retracement level of the recent decline from the 1.3318 high to 1.3232 low. If there is a positive break above the triangle and the 1.3280 resistance, there could be more gains.

The next stop could be 1.3300 and the 76.4% Fib retracement level of the recent decline from the 1.3318 high to 1.3232 low. Above 1.3300, the pair may continue to gain and it will most likely break the 1.3318 high to test the 1.3350 level.

On the downside, a break below the 1.3250 support may call for an extended downside correction to 1.3220 before a fresh upward move.

Aayush Jindal

Aayush has spent over a DECADE as a financial markets contributor and observer. He specializes in market strategies and technical analysis, comes with an IT background. He possesses strong technical analytical skills and is well known for his entertaining and informative analysis of the currency, commodities, Bitcoin and Ethereum markets. He is a software engineer by profession, loves blogging and observing financial markets.

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