Market Analysis: GBP/USD Starts Recovery While USD/CAD Corrects Lower

FXOpen

GBP/USD started a recovery wave from the 1.2040 zone. USD/CAD is correcting gains and trading below the 1.3700 support.

Important Takeaways for GBP/USD and USD/CAD Analysis Today

· The British Pound is eyeing a fresh increase above the 1.2270 resistance.

· There is a connecting bullish trend line forming with support near 1.2180 on the hourly chart of GBP/USD at FXOpen.

· USD/CAD rallied toward the 1.3800 level before it started a downside correction.

· A declining channel is forming with resistance near 1.3700 on the hourly chart at FXOpen.

GBP/USD Technical Analysis

On the hourly chart of GBP/USD at FXOpen, the pair accelerated lower below the 1.2200 zone. The British Pound even traded below the 1.2120 support against the US Dollar, as discussed in the previous analysis.

Finally, the bulls appeared near the 1.2040 zone. The pair is now attempting a recovery wave above the 50-hour simple moving average and 1.2120. There was a spike toward the 1.2270 resistance. A high has formed near 1.2261 and the pair is now consolidating gains.

There was a break below the 23.6% Fib retracement level of the upward move from the 1.2105 swing low to the 1.2261 high. The RSI moved below the 50 level on the GBP/USD chart and the pair is now approaching a major support at 1.2180.

There is also a connecting bullish trend line forming with support near 1.2180. The trend line coincides with the 50-hour simple moving average and the 50% Fib retracement level of the upward move from the 1.2105 swing low to the 1.2261 high.

The next major support is 1.2120. If there is a break below 1.2120, the pair could extend the decline. The next key support is near the 1.2040 level. Any more losses might call for a test of the 1.2000 support.

On the upside, the pair might face resistance near 1.2200. The next resistance is near 1.2270. An upside break above the 1.2270 zone could send the pair toward 1.2350. Any more gains might open the doors for a test of 1.2420.

USD/CAD Technical Analysis

On the hourly chart of USD/CAD at FXOpen, the pair rallied toward the 1.3800 resistance zone before the bears appeared. The US Dollar formed a high near 1.3785 and recently declined below the 1.3700 support against the Canadian Dollar.

There was also a close below the 50-hour simple moving average and 1.3680. The pair settled below the 23.6% Fib retracement level of the upward move from the 1.3416 swing low to the 1.3785 high.

There is also a declining channel forming with resistance near 1.3700. Immediate support is near 1.3640. The first major support is near the 50% Fib retracement level of the upward move from the 1.3416 swing low to the 1.3785 high at 1.3600.

A close below the 1.3600 level might trigger a strong decline. In the stated case, USD/CAD might test 1.3500. Any more losses may possibly open the doors for a drop toward the 1.3415 support.

If there is a fresh increase, the pair could face resistance near the 50-hour simple moving average at 1.3700. The next key resistance on the USD/CAD chart is 1.3785. If there is an upside break above 1.3785, the pair could rise toward the 1.3850 resistance.

The next major resistance is near the 1.3880 level, above which it could rise steadily toward the 1.4000 resistance zone.

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