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Hugo in HTO Trading,

GBPCAD: Strong bounce

Since the start of the year the currency lost more than 17.5% however last week rose more than 2.5% and is in a potential phase change, shifting from a bearish to a recovery phase.

Last week the GBPCAD rose with a wide range and closed near the high of the week, also managed to close above the previous week high, which suggests a strong bullish momentum.

The stochastic is showing a strong bullish momentum although is still below the 50 mid line.

Expecting an upward move to a weekly resistance at 1.7532 on a break above the previous week high at 1.6852 (scenario 1) however a break below the key level at 1.6606 could drag down the currency to a Fibonacci extension at 1.5850 (scenario 2).