GBP/CAD stages mild bounce as loonie underperforms

GBP/CAD managed to post a mild daily gain on Thursday, although it finished off daily highs and near 32-month lows, as the loonie weakened sharply during the New York session, tracking down oil prices. GBP/CAD ended the day around 1.6780, up 0.16%.

WTI turned sharply lower and fell to 2-month lows after EIA reported a smaller-than-expected draw in US crude inventories (-2.222 million vs -2.500 million expected).

From a technical perspective, the recent bounce could be considered a mere correction as daily indicators look exhausted to the downside, with 1.6693, 32-month low scored on Wednesday at risk. In the 4 hours chart, indicators have already corrected oversold conditions but remain well into negative territory, while the pair trades below the 20 SMA, which offers immediate resistance at 1.6865, favoring more slides over the upcoming sessions.

Support levels: 1.6690 1.6630 1.6585. Resistance levels: 1.6865 1.6970 1.7040.