GBP/CAD upside capped by 1.8400

Pound's strength sent the GBP/CAD cross up to a fresh 5-day high of 1.8404 on Monday, with the rally being fueled by Canadian dollar's weakness, dragged lower by a decline in oil prices.

However, GBP/CAD eased somewhat from the 1.8400 area and it was last trading around 1.8370, recording a 0.53% daily gain.

GBP/CAD technical view

“The rally stalled around the critical 1.8400 figure, from where the cross retreated last week, but generally speaking chances are of a break higher, as intraday technical readings maintain a positive tone,” said Valeria Bednarik, chief analyst at FXStreet. “In the 1 hour chart, the technical indicators have turned flat within positive territory, whilst the 20 SMA keeps rallying below the current price, now around 1.8330. In the 4 hours chart, the price is above its 20 SMA that anyway lacks clear directional strength, whilst the RSI indicator heads north around 65, supporting a continued advance up to the 1.8580/1.8610 region should the mentioned resistance is clearly surpassed.”

Support levels: 1.8330 1.8270 1.8220. Resistance levels: 1.8410 1.8465 1.8520.