Chart: Long-term correction levels on GBP/CAD

This GBP pair has been trending higher for some time and looks poised to test its long-term support zone soon.

Is the uptrend still our friend in this regard?

Take a look at these inflection points that I track on the daily time frame.

GBP/CAD Daily Forex Chart from TradingView

The UK economy has a flurry of top reports this week, including the change in July claimants, CPI and retail sales figures.

Can these data points continue to support the ongoing rally in GBP/CAD?

Note that the oil-linked Loonie has put up quite a fight these days, as resurgent geopolitical tensions in the Middle East keep energy commodity traders in the loop about a global supply crunch.

Remember that directional biases and market price volatility conditions are usually driven by fundamentals. If you haven’t done your homework on the British pound and the Canadian dollar yet, then it’s time to check the economic calendar and stay up to date with the daily fundamentals!

GBP/CAD is stalling on the 38.2% Fibonacci retracement of its major rally seen on the long-term chart as sterling bulls could look to take the pair back to the swing high near the minor psychological 1.7850 threshold here.

A further correction could still drop to the 50% Fib near S1 (1.7410), the 100 SMA dynamic inflection point and a major psychological sign, while the 61.8% level could be the line in the sand for a bullish pullback , because it also coincides with a field of interest.

Note that the 100 SMA is above the 200 SMA on the daily chart to suggest that upward momentum is present and that these technical indicators could hold as dynamic support on the downside.

Watch out for a break below the 200 SMA that lines up with the trend line that has been holding since last September, as this could mark the start of a major reversal!