GBPCAD is experiencing its fifth consecutive red candle today as the bears are trying to cancel out the strong upleg that pushed GBPCAD to the highest level since February 23, 2022. They appear to be in control of the market at this stage with the pair hovering a tad above the rectangle that has been affecting the price action since December 2022.

The momentum indicators are firmly on the bears’ side at this juncture. The Average Directional Movement Index (ADX) is edging aggressively lower and thus confirming the end of the recent upward trend, and the RSI has returned below its 50-midpoint. Crucially, the stochastic oscillator is moving lower in a vertical fashion and thus sending a strong bearish message.

Should the bears feel confident, they would try to push USDCAD back inside the aforementioned rectangle. But they first have to overcome the busy 1.6819-1.6866 range that is populated by the May 6, 2021 low and the 50- and 100-day simple moving averages (SMAs). The February 13, 2023 upward trendline could trouble the bears but, if successful, they could then set their eyes on the lower boundary of the rectangle.

On the other hand, the bulls are desperately trying to halt the current downleg. If they manage to defend the 1.6819-1.6866 area, they could then have a go at the 1.7080 area and the chance to record a new 2023 high.

To sum up, with the ample support from the momentum indicators GBPCAD bears remain committed to the current downward move and they continue to target the lower boundary of the recent rectangle.