GBP/CAD Correcting from 1.6986

The Great Britain pound versus the Canadian dollar currency pair reached the important level of 1.6986, an area from where two outcomes are possible.

Long-term perspective
The price, after confirming the weakened support area of 1.5936 as support via the bottoming structure that began in August, started an appreciation that succeeded in overcoming important areas, like 1.6413 and 1.6620, respectively, a behavior that displays bullish commitment.
After peaking at 1.7093 while reaching the targeted 1.6986, the market dropped to — at the time of writing — 1.6876, an expected development when profit booking takes place. This opens the door for aggressive shorting which targets 1.6620. Such an opportunity will be feasible if the previous day’s low — October 23 — is taken out.
On the other hand, the price could try to appreciate from the current area, which translates into a possible low at 1.6816. From here, two choices are available. The first one is aggressive and requires the current day — October 24 — to close above the high of the previous one. In this case, the market could see a new upwards leg, targeting 1.7160. The second one is conservative and demands the price getting above 1.6986 and confirming it as support, a case in which the target would be 1.7499

Short-term perspective
The price got out of the ascending channel by piercing the resistance trendline. In such cases, two scenarios are plausible.
In the first one, the price manages to confirm 1.6959 as support and then pushes up towards 1.7288, which represents the first target.
The second one allows depreciation, in which case every support could serve as a potential longing area, the attention being concentrated towards 1.6684 and 1.6326, respectively. For both, 1.6959 is the first target, followed by 1.7288.
Only a breach of the double support made possible by the 1.6326 level and the lower trend line of the ascending channel will give credit to the bears.

Levels to keep an eye on:

D1: 1.6986 1.7160 1.7499 1.6620
H4: 1.6959 1.7288 1.6684 1.6328

If you have any questions, comments, or opinions regarding the Technical Analysis, feel free to post them using the commentary form below.

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