GBP/USD started a downside correction from 1.2450. USD/CAD is signaling a fresh decline towards the 1.3300 and 1.3200 support levels.

Important Takeaways for GBP/USD and USD/CAD

· The British Pound struggled to clear the 1.2420 and 1.2450 resistance levels.

· Earlier, there was a break above a major bearish trend line with resistance near 1.1700 on the daily chart of GBP/USD.

· USD/CAD is facing a strong resistance near the 1.3700 zone.

· It traded below a key contracting triangle with support near 1.3600 on the daily chart.

GBP/USD Technical Analysis

After forming a base above the 1.0350, the British Pound started a steady increase against the US Dollar. GBP/USD gained pace for a move above the 1.1100 and 1.1500 resistance levels.

There was a move above the 1.2000 resistance and the 50-day simple moving average. During the increase, there was a break above a major bearish trend line with resistance near 1.1700 on the daily chart of GBP/USD.

GBP/USD Daily Chart

The pair even moved above the 1.2220 level and traded as high as 1.2446 on FXOpen. It is now correcting gains and trading below the 1.2350 level.

Recently, there was a move below the 1.2220 and 1.2200 support levels. On the downside, an initial support is near the 1.1950 area. It is near the 23.5% Fib retracement level of the upward move from the 1.0341 swing low to 1.2466 high.

The next major support is near the 1.1800 level. If there is a break below 1.1800, the pair could extend its decline. The next key support is near the 1.1400 level. It coincides with the 50% Fib retracement level of the upward move from the 1.0341 swing low to 1.2466 high

Any more losses might call for a test of the 1.1200 support. An immediate resistance is near the 1.2200 level. The next resistance is near the 1.2450 level. If there is an upside break above the 1.2450 zone, the pair could rise towards 1.2600. The next key resistance could be 1.3000.

USD/CAD Technical Analysis

The US Dollar started a fresh decline from well above the 1.4000 zone against the Canadian Dollar. USD/CAD declined below the 1.3800 and 1.3720 levels.

It even spiked below the 1.3300 level and traded as low as 1.3226. In Nov 2022, it started a fresh increase above the 1.3400 level. The pair climbed above the 1.3500 level. There was a move above the 50% Fib retracement level of the downward move from the 1.3977 swing high to 1.3226 low.

USD/CAD Daily Chart

However, the bears were active near the 1.3700 zone. The pair failed to clear the 61.8% Fib retracement level of the downward move from the 1.3977 swing high to 1.3226 low.

It is now moving lower from 1.3700. There was a break below a key contracting triangle with support near 1.3600 on the daily chart.

An immediate support is near the 1.3400 level. The first major support is near the 1.3225 level. Any more losses may possibly open the doors for a drop towards the 1.3000 support zone in the near term.

On the upside, the pair is facing resistance near the 1.3700 zone. The next major resistance is near the 1.3800 level. A clear break above the 1.3800 level could open the doors for more gains. The next major resistance is near the 1.4000 level, above which USD/CAD could rise steadily towards the 1.4200 resistance zone.

This forecast represents FXOpen Companies opinion only, it should not be construed as an offer, invitation or recommendation in respect to FXOpen Companies products and services or as financial advice.

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Filed under: News - @ January 2, 2023 2:55 am