GBP/CAD is pulling back after unfolding a partial down-leg within a broader rising channel.
GBP/CAD returns to the underside of a trendline it has broken below. The pair is consolidating after falling within a rising channel. It is probably in a short-term downtrend, which, given the principle that “the trend is your friend,” marginally favors more downside. The pair broke below an important trendline on October 3. It then bottomed out and has since recovered back up to the underside of the trendline.
Such a move would be expected to reach an initial downside target at 1.7620 , followed by about 1.7605 . A decisive breakback above the trendline, on the other hand, would suggest a reversal of the trend. This is possible given the medium and longer-term trends are bullish and the pair is in a rising channel. Further, the Moving Average Convergence Divergence has crossed above its signal line and is rising steeply, indicating strong upside momentum accompanies the current move.
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