GBPCAD has been trading in a range since mid-2015, between 1.9800 and 2.0970. If the important support level at 1.9800 is broken to the downside, this will confirm the formation of a double top chart pattern, which is a trend reversal pattern. Such a move would reverse the uptrend that was in place since the beginning of January 2013.
The 38.2% Fibonacci retracement level at 1.9887 is acting as immediate support. This is the retracement level of the rise from 1.8147 to 2.0970 (the April to August 2015 rise). A bounce higher would find resistance at the 23.6% Fibonacci at 2.0300. As long as prices remain above the key 2.000 psychological mark and above the 200-day moving average, there is scope for more upside momentum. However a break below 1.9800 would confirm the bearish double top pattern and open room for prices to fall towards the 50% Fibonacci.
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