GBPCAD declined sharply this week. The double top trend reversal pattern was formed after the market broke the neckline support level at 1.9800. After a retest of this level, prices resumed their fall to reach 1.9050 on Wednesday, the lowest since June 2015.
Technical indicators suggest GBPCAD has scope for further downside. MACD is below zero, while RSI is below 50 and trending down. The 50-day moving average recently crossed below the 100-day moving average, giving a bearish signal and appears that it will likely cross below the 200-day moving average as well. The key level at 1.9000 comes into view. If it fails to provide support, then a break of this level would accelerate a sell off in GBPCAD. But since RSI has approached oversold levels, this suggests there would be a pause in the decline in the short term.
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