GBPCAD – Bought at key average
17th January 2018
Our medium term outlook for GBPCAD has been bullish since the middle of September when the spot and RSI both traded above their relevant Moving Averages.
The resulting upside in GBPCAD of 8 big figures was capped by the top of the weekly Ichimoku Cloud pattern, where profit taking developed. Peaking in December, the bulk of the holiday period was dominated by a negative reaction that took GBPCAD back to the 21 week exponential moving average and the bottom of an Ichimoku Cloud that had thinned significantly.
Both the Cloud and the average held GBPCAD, on a weekly closing basis, and the RSI moving average was not even tested. Last week saw buyers return to the cross and the most positive performance for 17 weeks resulted – taking GBPCAD above the Cloud – a move that, in our assessment, should lead to a new upward leg.
The immediate Fibonacci extension point is 1.7384, December’s peak of 1.7467 is next with a move through that area exposing sentiment towards 1.7769.
