Technical Analysis – GBPCAD bounces within critical support band, bearish risks linger

GBPCAD is struggling to lift over the mid-Bollinger band at 1.5990 and the fresh highs of 1.6029 after unearthing footing within a key support base, which was shaped by the October 2016 and the January 2017 significant troughs. The falling simple moving averages are still endorsing the negative bearing in the pair.

The short-term oscillators reflect the recent positive developments in the pair but are signalling that upside forces appear to be feeble. That said, the MACD is in the negative area and has yet to indicate that positive momentum has dried up. Meanwhile, the positive vibe in the RSI and the stochastic oscillator is flashing modest concerns that the positive impetus in the pair may be lacking profound backing.

In the positive scenario, immediate upside constraints are emanating from the mid-Bollinger band and the adjoining highs around 1.6029 ahead of the 1.6100 handle. In the event buyers overstep the 1.6100 barrier, the 1.6190-1.6231 resistance band associated with the October 2019 lows may be challenged. From here, if the price overcomes the upper Bollinger band, the falling 50-day SMA at 1.6266, and the 1.6315 resistance border, this may mimic a booster jab to buyers’ currently eroded confidence.

Otherwise, if the pair maintains a heavy vibe and selling interest intensifies, sturdy support could commence with a revisit in the price to the 1.5734-1.5797 boundary. Should this key base, which is fortified with the lower Bollinger band fail to terminate negative tendencies in the pair, the bears may then dive for the 1.5573-1.5623 support obstacle that stretches back to the July-August 2013 lows.

Summarizing, GBPCAD is sustaining a bearish bias below the SMAs and the 1.6503-1.6566 resistance border. A dive below the 1.5734-1.5797 support foundation may trigger concerns about further deterioration in the pair, while a push in the price over the 1.6100 mark could feed positive momentum.

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