It's Throwback Thursday and we look back to our GBPCAD sell call initiated on Monday. The cross extended its recent rejection slide from the 1.77 handle and broke through the key 1.7500 psychological mark. The subsequent bearish pressure on Thursday dragged the cross to the lower end of over one-month-old trading range, which coincides with 100-day SMA and should now act as a key pivotal point for short-term traders.
Meanwhile, technical indicators on the daily chart have just started drifting into the bearish territory and are still far from being in the oversold territory. The set-up supports prospects for an eventual bearish break through the mentioned confluence support. However, it will be prudent to wait for some follow-through selling, possibly below the 1.7200 handle, before positioning for any further near-term depreciating move.
The cross might then accelerate the slide further towards challenging the 1.7100 intermediate horizontal support before eventually dropping to test sub-1.70 levels.
On the flip side, any attempted recovery now seems to confront some fresh supply near the 1.7300 mark. This, in turn, should cap the upside near the 1.7330-35 region, which should now act as a stop-loss level for any fresh bearish positions initiated below the 1.7200 handle.