Could we see a reversal from here?Loonie (USD/CAD) is rising towards the pivot, which acts as a pullback resistance, and could reverse towards the 1st support, which is a pullback support.
Pivot: 1.4004
1st Resistance: 1.4081
1st Support: 1.3936
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GBPUSD closed near 1.3392 on Friday, up 0.27%. UK Retail Sales for August rose 0.5% MoM against a forecast of -0.2%, but sterling remained near its weakest levels in weeks after a heavy week of central bank decisions:
The Fed raised rates by 25bps to 3.75-4.00% in a unanimous decision, and its projections point to another hike in 2026.
The Bank of England held Bank Rate at 3.75% in a 6-3 vote, with three members backing a hike. However, the QT plan was less hawkish than expected, and GBP fell after the announcement.
UK CPI for August came in at 3.1% YoY, in line with expectations.
Fundamental 21-25/9/26
Key Events This Week | Forecast | Previous
US: Tuesday — Richmond Fed Index (Sep)
UK: Wednesday — Flash Composite PMI (Sep) | ~52.5 (Services ~52.5, Manufacturing 51.7)
US/EZ: Wednesday — Flash PMIs (Sep)
Thursday — Trump-Xi Summit in Washington
US: Friday — Durable Goods Orders (Aug)
This week, the key factor for GBP is the UK Flash PMI on Wednesday. A stronger-than-expected reading would support the case for the BoE to stay cautious and could support GBP, while a weaker result could add pressure. On the USD side, the Fed's hike has left US rates slightly above UK rates, which continues to support the dollar. The Trump-Xi summit and oil prices near $96 per barrel may also influence risk sentiment.
With no BoE or Fed rate decisions on the calendar, GBPUSD is expected to trade within a range with a slight downside bias unless the PMI data surprises.
Technical Analysis — GBPUSD 1D
Bias: Buy at support
View: Price has broken the ascending trendline from November and remains below the key EMAs (1.3425-1.3479). However, RSI at 37.6 is close to oversold territory. The preferred approach is to wait for a pullback into the 0.618-0.786 Fibonacci zone before buying. The early-August low at 1.3274 sits inside this zone. If price holds within it, a rebound toward 1.3426 is possible. If price closes below 1.3170, the setup is invalidated.
Resistance: 1.3426 / 1.3528
Support: 1.3324 / 1.3179
Target: 1.3426 → 1.3528
Cut Loss: Daily close below 1.3170 USDCAD — Bearish Reversal SetupUSDCAD — Bearish Reversal Setup
After a prolonged and aggressive bullish run that pushed USDCAD from the 1.3760 region all the way up to 1.4015, the market is now showing early signs of exhaustion. What was once a clean and powerful uptrend is beginning to crack and the chart is giving us several reasons to pay close attention to the downside.
Bearish Divergence
The most significant signal on this chart is the Bearish Divergence forming on the RSI. While price has been consistently printing Higher Highs, the RSI has been making Lower Highs, moving in the opposite direction of price. This is a classic sign that the bullish momentum is fading beneath the surface. The buyers are losing strength even as price continues to push higher. When divergence appears after a strong trending move, it is one of the earliest and most reliable warnings of a potential reversal ahead.
Distribution Phase
Following the strong rally, price has entered a consolidation zone near the highs, forming what appears to be a Distribution Phase. This is the stage where price is struggling to push higher, momentum is weakening and the structure is starting to shift. The market is coiling near resistance at 1.40150, unable to make a clean new high.
The Neckline
The critical level on this chart is the neckline at 1.39739. This is the support level holding the current structure together. A clean break and close below 1.39739 would confirm that the distribution phase is over and sellers have taken control. This would be our trigger to enter the trade.
Two Targets
Rather than closing the entire position at one level, this setup offers two take profit zones allowing us to manage the trade in stages and maximize the potential of the move.
The first target sits at 1.39324, a nearby support level where we can book partial profits and secure the trade. If price continues to push lower and momentum remains bearish, the second target sits at 1.38913, a stronger support zone that aligns with previous price structure from mid September.
By scaling out in two stages we protect profits early while still keeping a portion of the trade open for the bigger move.
Trade Plan:
🔴 Sell Stop: 1.39739 (neckline break confirmation)
🔵 Stop Loss: 1.40150 (above last Higher High)
🟢 Take Profit 1: 1.39324 (first support zone)
🟢 Take Profit 2: 1.38913 (deeper support zone)
Until the neckline breaks cleanly, this remains a wait and watch setup. No confirmation, no trade.
Not financial advice. Trade your own plan.
