GBP/CAD Slips as Short-Term Ascending Channel Breaks

Market Overview

Monday’s trading session saw renewed focus on European markets as investors shifted their attention from Asian currencies, which dipped following a weaker-than-expected Chinese stimulus package. A banking holiday in Canada also helped redirect interest toward the London market, positioning it as a key determinant of sentiment for today’s session. Meanwhile, cryptocurrencies continued their rally, buoyed by optimism over regulatory easing under President Trump’s administration.

Technical Analysis

On the one-hour chart, GBP/CAD has adopted a bearish stance after breaking out below its recent ascending channel. This shift suggests increasing downward pressure, with the price currently targeting the first support level at 1.79578 and then the key support floor at 1.79436.

Should the price successfully breach 1.79436, subsequent bearish targets emerge at 1.79335 (127.20% Fibonacci extension), 1.79206 (161.80% Fibonacci extension), and eventually 1.79064 (200% Fibonacci extension).

Conversely, if buyers regain control and push the price above the significant resistance level at 1.79808, the bearish scenario would be invalidated. Such a move would indicate a potential resumption of the bullish momentum and a return to within the previously broken ascending channel.

Oscillators and Trend Indicators

The RSI is indicating a bearish outlook, suggesting momentum is tilted towards the sellers. The MACD remains below the signal line, pointing to further downward pressure, while the moving averages also reflect a bearish alignment, underscoring the prevailing negative sentiment.

Key Technical Levels Overview

Resistance Level:

• Resistance 1: 1.79808

Current Price: 1.79601

Support Levels:

• Support 1: 1.79578
• Support 2: 1.79436
• Support 3: 1.79335
• Support 4: 1.79206
• Support 5: 1.79064

Key Events to Monitor

The economic calendar is relatively quiet for both the pound and the Canadian dollar. However, traders will keep a close watch on the CB Leading Index release for the UK, which provides an outlook for future economic activity. A reading above expectations could help strengthen the pound and counterbalance some of the current negative pressure on GBP/CAD.

Conclusion

GBP/CAD is currently navigating a bearish environment, with sellers in control after a break below the ascending channel. Any further declines hinge on a successful breach of the next key support levels, while the prospect of a bullish reversal depends on a break above the resistance at 1.79808.