- GBP/CAD is on the verge of a significant correction.
- GBP net short positions are indicating that there could be more short covering on the way soon.
GBP/CAD is a complicated mix of net shorts and technical pointing to a downside continuation in the pending correction towards the daily structure.
The following illustrates the outcome look from both an hourly perspective to a daily perspective.
The bears are stepping in at the highs in early Asia and considering the net short position in GBP and month-end, further squaring of positions could be in order which could equate to an upside continuation in the coming sessions.
The alignment o the 38.2% Fibonacci retracement and the 21-EMA along with the prior hourly lows of 1.7340 are compelling for a meanwhile downside target.
This area would be expected to act as a strong area of support.
However, the first hurdle will be an area of liquidity near 1.7470 and around the 23.6% Fibo.
Having said that, the daily outlook is bearish below 1.7440 to pick up liquidity from the prior resistance that meets the 10-day EMA.