The Canadian Dollar advanced against rivals Wednesday amid renewed hopes a deal to save the North American Free Trade Agreement (NAFTA) could be announced before the week is out, and analysts at Goldman Sachs are forecasting the Loonie will continue to rise over coming months.
GBP/CAD reaches resistance and pulls back but it is too early to say whether this is a reversal or pause in the recovery. Both GBP and CAD eye inflation and retail sales data on their domestic calendars this week.
The Canadian Dollar remained on the front foot Wednesday after statements from President Donald Trump and other officials gave markets fresh hope that a deal to preserve the North American Free Trade Agreement (NAFTA) can be reached, but analysts are sceptical of recent headlines and reluctant to back the Loonie.
The weekly chart is showing signs of a technical reversal after posting three up-weeks in a row and forming a Japanese candlestick pattern called a 'three white soldiers', which is a sign of a bullish reversal in the exchange rate.
The Canadian Dollar handed back earlier gains Friday after official data showed the nation's labour market wobbling in August, countering optimism that prevailed after a Bank of Canada (BoC) deputy governor said policymakers recently contemplated stepping up the pace of their interest rate rises.
The Canadian Dollar weakened a touch Wednesday after the Bank of Canada (BoC) left its interest rate unchanged for December as many had expected, leaving investors to focus on mounting risks to North American Free Trade Agreement (NAFTA) and Canada's trade relationship with the US.
GBP/CAD has recovered on NAFTA risks and Brexit progress and the charts suggest the pair may be reversing the down-trend on a short-term basis. The main release for the Pound is sector PMI data and for CAD it is the meeting of the Bank of Canada.