Chart: Can GBP/CAD sustain its uptrend?

GBP/CAD has broken above an uptrend line these days and it looks like another dip to support is in order.

Can the uptrend remain intact?

Let’s take a closer look at the area of ​​interest seen over the 4 hour time frame!

GBP/CAD 4 Hour Forex Chart from TradingView

Crude oil prices have been in trouble again these days, lifting the correlated loonie and dragging GBP/CAD down from its highs around the 1.8100 region.

The pair has now reached its 50% Fibonacci retracement level, just above S2 (1.7890), but could still drop further to the uptrend line it has held for the past two months.

Will the support hold or break this time?

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!

The 61.8% Fib level is closer to the trendline and former resistance area, which also happens to coincide with the 200 SMA dynamic inflection point which adds to its strength as a floor. Additionally, the 100 SMA is above the 200 SMA, suggesting that the uptrend is more likely to resume than reverse.

However, a break lower could pull GBP/CAD further south towards S4 (1.7770) then S5 (1.7710) near the swing low as another higher for Crude could trigger a reversal for the pair.

Better watch the headlines from the OPEC-JMMC meeting, which will continue to gauge where energy commodities and the oil-linked Canadian dollar could be headed.

Whichever bias you end up trading, remember to practice proper risk management and be aware of top market catalysts when trading it. Luck!