GBP/USD attempts to break higher once more
GBP/USD has been channeling higher so far this week, with the price breaking through $1.3053 resistance. There is another resistance level above that at $1.3062 which needs to be broken to provide greater confidence that the recent weakness is over.
Watch out for potential support on the descending trendline which was clearly respected as new support yesterday. A break below $1.3014, and in particular $1.2988 would signal a likely continuation of the weakness seen at the beginning of last week.
USD/CAD rebound could provide selling opportunity
USD/CAD is beginning to move higher this morning, following a gradual move lower at the beginning of the week. The past five such bounces have seen the pair move lower from the zone between the 50 and 100-hour simple moving average (SMA).
With that in mind, we could be seeing the beginning of a move which could allow a good shorting opportunity. Given the gradual move lower recently, a 76.4% retracement seems unlikely, and thus the zone between the 50% and 61.8% retracement look interesting for shorts if it comes about. Given the clear inability to break through 100-hour SMA, it makes sense to utilise that indicator for stops. However, ultimately we would need to see a break through $1.2609 to negate the recent downtrend.