GBP/USD started a fresh increase above the 1.2350 resistance area. Conversely, USD/CAD declined heavily and it is now trading well below the 1.4000 pivot level.
Important Takeaways for GBP/USD and USD/CAD
- The British Pound traded as low as 1.2266 before starting a fresh increase.
- There was a break above a key bearish trend line with resistance near 1.2400 on the hourly chart of GBP/USD.
- USD/CAD declined heavily below the 1.4100 and 1.4000 support levels.
- There is a declining channel forming with resistance near 1.3925 on the hourly chart.
GBP/USD Technical Analysis
This past week, the British Pound extended its decline below the 1.2400 support area against the US Dollar. The GBP/USD pair traded to a new monthly low at 1.2266 on FXOpen before starting a fresh increase.
The pair recovered nicely above the 1.2320 and 1.2350 resistance levels. Besides, there was a break above the 1.2400 resistance area and the 50 hourly simple moving average.
The bulls were able to lead the pair above the 38.2% Fib retracement level of the downward move from the 1.2640 high to 1.2266 low. More importantly, there was a break above a key bearish trend line with resistance near 1.2400 on the hourly chart of GBP/USD.
The pair traded above the 1.2420 level and tested the 50% Fib retracement level of the downward move from the 1.2640 high to 1.2266 low. It is currently trading nicely above the 1.2400 level and it seems like the bulls are likely to aim an upside break above the 1.2460 and 1.2480 resistance levels.
The next major resistance is near 1.2500, above which the pair could continue to rise towards the 1.2560 level. On the downside, there is a major support forming near the 1.2380 level and the 50 hourly simple moving average.
If GBP/USD fails to stay above 1.2380 and 1.2350, there is a risk of more losses below the 1.2320 and 1.2300 levels in the near term.
USD/CAD Technical Analysis
The US Dollar formed a key top near the 1.4170 level and started a strong decline against the Canadian Dollar. The USD/CAD pair broke a few important supports near 1.4050 to enter a bearish zone.
To initiate the decline, there was a break below a major bullish trend line with support at 1.4070 on the hourly chart. Besides, there was a close below the 1.4000 support and the 50 hourly simple moving average.
The pair even broke the 1.236 Fib extension level of the upward move from the 1.4007 low to 1.4173 high. It seems like there is now a declining channel forming with resistance near 1.3925 on the hourly chart.
The pair is testing the 1.618 Fib extension level of the upward move from the 1.4007 low to 1.4173 high. If there is a downside break below the 1.3900 level, the pair could extend its decline below the 1.3880 and 1.3850 levels.
On the upside, an initial resistance is near the 1.3925 and 1.3930 levels. The main resistance is near the 1.3980 level and the 50 hourly simple moving average.
If USD/CAD breaks the channel resistance and gains pace above 1.3950, it could even recover above 1.3980. In the mentioned case, the bulls are likely to aim a test of 1.4000 and 1.4020.