GBP/USD declined heavily this past week below the 1.2250 support area. USD/CAD is climbing higher and remains well supported above the 1.3200 level.
Important Takeaways for GBP/USD and USD/CAD
- The British Pound fell significantly after it broke the 1.2250 and 1.2200 support levels.
- Recently, there was a break above a short term bearish trend line with resistance near 1.2140 on the hourly chart of GBP/USD.
- USD/CAD is trading nicely above the 1.3180 and 1.3200 support levels.
- There is a connecting bullish trend line forming with support near 1.3210 on the hourly chart.
GBP/USD Technical Analysis
The British Pound started a strong decline from well above the 1.2400 level against the US Dollar. The GBP/USD pair broke the 1.2350 and 1.2250 support levels to enter a bearish zone.
The decline was such that the pair even broke the 1.2200 support level and settled well below the 50 hourly simple moving average. A swing low was formed near the 1.2079 level on FXOpen and the pair is currently correcting higher.
It broke the 1.2120 resistance level plus the 23.6% Fib retracement level of the recent decline from the 1.2249 high to 1.2079 low. Moreover, there was a break above a short term bearish trend line with resistance near 1.2140 on the hourly chart of GBP/USD.
It opened the doors for more gains above the 1.2150 level. The pair recently tested the 61.8% Fib retracement level of the recent decline from the 1.2249 high to 1.2079 low.
However, the upward move was capped near the 1.2185 level and the pair is currently consolidating in a range. On the downside, there is a decent support forming near the 1.2130 level and the 50 hourly SMA.
If there is a downside break below 1.2120, the pair could resume it decline in the near term. Conversely, the pair could recover further once it clears the 1.2185 resistance.
The next main resistance is near the 1.2200 level, above which the pair is likely to accelerate towards the 1.2250 level in the near term.
USD/CAD Technical Analysis
The US Dollar formed a decent support base near the 1.3100 level against the Canadian Dollar. The USD/CAD pair climbed above the 1.3140 and 1.3150 resistance levels to start a solid upward move.
The pair gained strength above 1.3200 and the 50 hourly simple moving average. A swing high was formed near 1.3265 and the pair corrected lower. It tested the 1.3200 support area and is currently moving higher.
It is trading well above the 50% Fib retracement level of the recent decline from the 1.3265 high to 1.3191 low. However, the upward move was capped by the 1.3240 level.
Moreover, the 61.8% Fib retracement level of the recent decline from the 1.3265 high to 1.3191 low acted as a resistance. Therefore, if there is an upside break above the 1.3240 level, the pair could revisit the 1.3265 level.
Any further gains might push the pair towards the 1.3280 and 1.3300 resistance levels. On the downside, there are many supports near the 1.3210, 1.3200 and 1.3180 levels.
Moreover, there is a connecting bullish trend line forming with support near 1.3210 on the hourly chart. As long as the USD/CAD pair is trading above the 1.3180 support level, there could be more upsides in the coming sessions.