Research Team at Societe Generale, suggests that after facing stiff resistance at graphical levels of 2.08/2.10 last year, GBP/CAD has embarked on a retracement.

Key Quotes

“The pair has confirmed a double top formed at those levels and a deeper correction looks likely. If we drop down to daily chart, it has also confirmed a head and shoulders formation. Currently it is testing the lower limit of a multi month channel at 1.95.

Monthly stochastic indicator is pulling back after testing a pivotal ceiling and has given a negative crossover pointing towards further downside. A break below 1.95 will lead to extension in downtrend towards 2014 highs of 1.86 with intermittent targets at 1.92 and 1.8850. 1.9850/1.99 caps immediate upside.”