The GBP/CAD dropped last week and the week before, after it recorded its highest level in more than 10 months at 1.7850. The drop in price was due to the Canadian Dollar's strength after the Employment Change data was released on Friday, June 9 and came in positive figures at 54.5K, more than the expected 11.5K and the previous one. Overall, we saw the Pair has dropped by more than 600 pips in two days.
The pair was trading inside a price channel; it finally broke it last week after two failed attempts and is now trading at 1.6930 below the downside trend line. Yet, we expect it will rise a little up after it reaches the 50% of Fibonacci levels at 1.6788 from the rising wave from 1.5735 to 1.7850, so it might rise to retest the broken channel and go back to decline further and lower than the last bottom. This is confirmed by the Stochastic indicator which gave us a buy signal.
The Next Few Days
From this analysis of the daily chart we can buy the pair at the current levels 1.6936 after we see bullish candles at the 50% level, keeping our target at 1.7200. We should wait for the channel retesting and sell the pair to 1.6870 and 1.6610.
We have to be careful in the upcoming days regarding hot news like the BoE governor Carney's speech tomorrow and the CPI from Canada on Friday.
