The British Pound (GBP) extended upward movement against the Canadian Dollar (CAD) on Friday, taking the price of GBP/CAD to 1.8119, ahead of Britain’s Manufacturing PMI. The technical bias remains bullish due to a Higher High on the daily chart.
As of this writing the pair is being traded around 1.8112 well above 1.8080, the opening price. The GBP lost strength in the early Asian session taking the price to 1.8070, but regained its position and is back to the current level. On upside, a resistance can be noted around 1.8195 (23.6% Fib Level of the last leg from the 1.7570 low to 0.8398 low), ahead of 1.8171 (200 SMA) and then 1.8119, the yesterday’s high. Currently, the pair is struggling to clear the 1.8119, as demonstrated in the following chart.
On the downside, an immediate support can be seen around 1.8070, the 38.2% Fib level ahead of 1.8026. The said level has been supporting the pair from last previous days. The next support level can be noted around 1.7994 (200 SMA), ahead of 1.7969 (the confluence of 50% level and 100-day SMA) as demonstrated in the above chart.
The technical bias is bullish because of higher highs and higher lows on the daily chart. The bias will remain bullish as far as the support area 1.7540 is intact.
Markit Manufacturing PMI (Dec)
The Britain’s manufacturing purchasing manufacturing index remained 53.7 points this December as compared to 53.5 points in the month before. Being an important indicator of business conditions and overall economic condition in UK, a higher reading is considered bullish for the British pound. Thus a better than expected actual outcome will exert buying pressure in the price of GBP/CAD.
Considering the overall technical and fundamental outlook, selling the pair is preferred if the price leaves a bearish engulfing or pin bar on the daily chart.