I wrote last month about how there were warning signs for bears in GBPCAD after a strong, steady and long decline in the cross during 2016.

A Marabuzo line, 1.6132, held the downside key and needed to be broken as RSI had given a positive cross of it’s moving average. The upside was, at the time, protected by the 21 week moving average but it is that situation that may have altered.

Last week’s strong demand had taken GBPCAD to test that trend defining average (unbroken on a closing basis since January 2016) and this week’s price action, so far, has seen that positive tone extend. Prices are currently trading at the most positive levels of 2017 and the weekly Keltner channel is beginning to angle higher.

These factors will confirm the bullish RSI indicator if the market closes this week above the average, currently at 1.6565.

If/when that break is confirmed the GBPCAD market is expected to focus on a 38% correction to the May-Oct decline at 1.7085 then 1.7239.

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