GBPCAD has recently bounced back above the 50-day simple moving average (SMA) following a 2% correction in June. This correction led the price below the SMA towards the upper ascending trendline that has been established since the autumn of 2023. While momentum indicators are showing positive signs, there are concerns that the current upswing may be losing steam.
The %K line of the stochastic oscillator seems to be slowing its ascent, even though it is currently positively aligned with the %D line. Additionally, the MACD has been gradually increasing, but has not yet turned positive or crossed above the red signal line. It will be crucial for bullish momentum to hold and extend the rebound towards the 20-day SMA, which is nearing the 1.7400 level, in order to strengthen the uptrend.
If the bullish momentum continues, breaking above the 20-day SMA resistance zone could lead to further gains towards the 1.7500 level and eventually the June peak of 1.7603. However, if the bears regain control, the 50-day SMA may act as support around the 1.7319 area before a possible test of the upper ascending trendline. A breach of this trendline could pave the way for a decline towards the 61.8% Fibonacci retracement level at 1.7159.
The longer-term bullish outlook remains unchanged despite the recent selloff. However, the current short-term bounce back is not yet on solid ground. Traders and investors should closely monitor key support and resistance levels to assess the future direction of GBPCAD. The uncertainty surrounding the strength of the rebound warrants careful analysis and strategic decision-making in the coming weeks.