GBP/CAD hits highs above 2.0700

FXStreet (Córdoba) - The GBP/CAD cross surged during the American afternoon, up to 2.0740 its highest since late December, on the back of oil prices decline. China's stocks plummeted, leading to a new leg south in oil prices, resulting in WTI crude oil futures falling down to $30.84, the lowest since December 2003, and Brent posting a fresh 12-year low around $31.90 a barrel.

GBP/CAD eased back from highs by the end of the day and is closing the day at a 2-week high of 2.0692, up 0.58% on the day.

GBP/CAD technical view

“The 1 hour chart shows that the technical indicators retreated from extreme overbought readings, but turned flat well above their mid-lines, whilst the price is well above a now bullish 20 SMA and hovers around a major Fibonacci resistance, the 23.6% retracement of the latest bullish rally at 2.0690”, said Valeria Bednarik, chief analyst at FXStreet. “In the 4 hours chart, the upward potential seems still limited, as the cross is holding around the top of its latest range without confirming yet further gains, as the technical indicators turned south within positive territory, whilst the 20 SMA remains horizontal, showing no actual directional strength”.

Support levels: 2.0630 2.0590 2.0540. Resistance levels: 2.0740 2.0790 2.0850.