Fib Retracement Trades on GBP/USD and USD/CAD

GBP/USD: 1-hour

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Cable is testing the 1.3750 psychological level after finding support just under the 1.3600 mark.

 

The pound’s current levels are interesting today because they line up with not only the 50% Fib retracement of last week’s downswing but also a key support level from early July.

 

A bounce lower from the Fib resistance would mean that the bears ain’t done shorting the pound just yet. GBP/USD could drop to the 1.3600 zone, yo!

If GBP/USD breaks above the 1.3750 zone that we’re watching, though, then the pair could make a play for the 1.3800 area of interest or the 1.3900 previous resistance level.

USD/CAD: Daily

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A few days ago, we identified a bearish divergence play when USD/CAD hit a long-term trend line resistance.

 

The bulls had other plans, however. USD/CAD broke the major resistance faster than BTS’ “Permission to Dance” hit the top charts!

 

The dollar is now back at 1.2575 that’s right smack at the trend line that we marked. This time around, it also lines up with the 38.2% Fib pullback of the last upswing.

Can the dollar maintain its bullish trend against the Loonie? Buying at current levels would get you in the potential uptrend at a good price especially if USD/CAD stays above the 200 SMA.

But wait! Watch the next candlesticks to see if the bears have run out of steam. If the dollar is just getting started with its pullback, then we could still see USD/CAD dip to the 61.8% Fib closer to the 100 SMA before it sees buying momentum.

Written by Big Pippin, Author from Baby Pips

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