Bearish Plunges by the GB Pound and Canadian Dollar Leaves Risks Still Lower

Technical Analysis

The British Pound and Canadian Dollar plunged to yet further long-term secular lows versus the US Dollar last week to reinforced early 2016 moves.

The GBPUSD is now close to its lowest level since 2010, whilst the USCAD has rallied to its highest level for more than 12 years.

This leaves January bias for further GBPUSD losses and USDCAD advances for the month.

More analysis of currency pairs


Another new cycle and secular low Friday after low level consolidation, to push through a key flagged support at 1.4346 to get close to the 2010 low at 1.4229 and leave a bear bias for Monday.

For Today:

  • We see a downside bias for a key long term target at 1.4229; break here aims for 1.4200 and then 1.4105.
  • But above 1.4315 opens risk up to 1.4363, maybe 1.428, which we would look to try to cap.

Moreover, bigger picture, the push through the 2015 low at 1.4566 reinforced previous bear signals from Q4 to leave a negative theme for January.

Short/ Intermediate-term Outlook – Downside Risks:

  • We see a negative tone with the bearish threat to 1.4229.
  • Break aims for 1.4000 and 1.3656.

What Changes This? Above 1.4816 signals a neutral tone, only shifting positive above 1.4945.

Monthly GBPUSD Chart



Although hesitant Thursday at 1.4400 psychological resistance, a surge through Friday (having held minor 1.4334/32 support) pushed above 1.4500 and 1.4600 resistances to leave an upside bias for Monday.

For Today:

  • We see an upside bias for 1.4621 and key long term retrace level at 1.4660; break here aims for maybe 1.4500.
  • But below 1.4334/32 opens risk down to 1.4250, which we would look to try to hold.

Furthermore, the December surge through the key 1.3457/62 resistance area and early 2016 push above 1.4000/30 sets a still bullish tone for January (and beyond).

Short/ Intermediate-term Outlook – Upside Risks:

  • We see a positive tone with the bullish threat to 1.4660 .
  • Break targets 1.4941/58 and 1.5000.

What Changes This? Below 1.3799 signals a neutral tone, only shifting negative below 1.3360.

Monthly USDCAD Chart


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