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FxWirePro: GBP/CAD capped at 5-DMA, eyes next major support at 61.8% Fib, stay short

  • GBP/CAD is extending gradual grind after break below major trendline support at 1.7175.
     
  • UK manufacturing PMI hits 3-month lows, misses estimates, weighing on the pound.
     
  • UK manufacturing PMI stood at 54.0, compared to a previous 54.3, missing estimates at 54.2.
     
  • Upside in the pair seems capped at 5-DMA which is immediate resistance at 1.7104.
     
  • Price action remains below daily cloud and major moving averages. Momentum studies are bearish. RSI shows weakness below 50 mark.
     
  • Price action has dipped below 50% Fib and we see scope for test of 61.8% Fib at 1.6822.
     
  • Retrace above trendline support at 1.7175 could see test of 21-EMA at 1.7244. Break above invalidates bearish bias.

Call update: Our previous call (https://www.econotimes.com/FxWirePro-GBP-CAD-finds-strong-support-at-200-DMA-17321-good-to-go-short-on-break-below-1398084) has hit TP1/2.

Recommendation: Book partial profits at lows. Hold for further weakness.

FxWirePro Currency Strength Index: FxWirePro's Hourly GBP Spot Index was at 48.352 (Neutral), while Hourly CAD Spot Index was at 91.1901 (Bullish) at 1230 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex
 

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