FX.co ★ GBP/CAD,The Potential Rising Retains, December 08, 2010 (Daily Strategy)

GBP/CAD

The GBP/CAD pair has dived sharply last week, seeming to breach its support level of 1.5840, a level that provides a meaningful support, given the merging of the Fibonacci level with the 200-day moving average on the pair. That said, there exist increasing concerns that the breach was only a bear trap, since in the Friday weekly close the pair left a 'tail' under the support level, in fact closing over it.

If this is indeed the truth, the pair retains the potential for rising from the current levels and to the 1.6350 resistance level. On its way there it is expected to meet the nearest resistance level at 1.6150.