GBPCAD Reversal Set Up
Price action in GBPCAD is looking very interesting here to play to the long side. Following a couple of really great short trades over the prior decline, the pair looks to have bottomed recently. The block of consolidation which formed over May saw strong bullish divergence on momentum studies. Price has since broken above the bearish trend line from YTD highs and is now testing resistance at the 1.6109 level. Bulls can looks for a break of this level targeting a move up to the 1.6293 level initially and 1.6551 thereafter.
Keep An Eye On
GBP is currently rallying on increased BOE hiking expectations. With UK inflation still soaring last month, showing no signs of slowing down, the market now judges that the BOE will be forced to follow the Fed and take more aggressive action on monetary policy. Meanwhile, with oil prices holding within their recent range, CAD has been a little weaker. If these themes continue near term, GBPCAD should find plenty of room for a fuller reversal higher.