GBPCAD - In a Bullish Trend But How Far Will It Go?

The GBPCAD pair continues to move higher, but a closer look reveals that this rally may be more corrective than impulsive.

GBPCAD Daily Chart

The Bullish Trend

• From a trend perspective, GBPCAD remains bullish. The long-term trendline is holding strong, and price hasn't come close to challenging it.

• Over the past six months, price has respected the 250-day EMA, reinforcing the stability of the broader uptrend.

• After a period of consolidation, price has now pushed back above the 20-day EMA, which suggests that a short-term buy setup could be forming.

Price Action Structure

Whilst the trend structure looks solid, the internal price action raises caution:

• Despite the bullish outlook, the rally has lacked a clean 5-wave impulsive structure. Instead, price action has been choppy and overlapping  which is more typical of a corrective retracement than a sustained impulse.

• Currently, it looks like we’re still within an X wave, and price may be forming a triangle, with a possible 'e' wave pullback still to come before the final leg up.

• My near-term expectation is for price to target the 1.90–1.93 zone, but only after the triangle completes. Any early breakout that reaches a new high may invalidate the current count, in which case I’ll reassess the structure.

Macro Perspective

• One of the key drivers behind CAD weakness could be the decline in oil prices, which tends to weigh heavily on the Canadian dollar due to the country’s reliance on energy exports.

Final Take

The trend is up but it’s likely corrective, not impulsive. I’m watching for a final pullback and triangle completion before a move toward 1.90+. If price breaks higher, I’ll be ready to rework the wave count and reassess trade timing accordingly.