Pound-Canadian Dollar Rate Week Ahead Forecast: 200-Day Average Providing a 'Floor', Risk of More Upside

Studies of the GBP/CAD charts show mixed forces at play, but we see a marginal bias towards more upside given the more established longer-term trends.

The Canadian Dollar extended losses Friday after official data appeared to suggest the jobs market ran out of gas in October, which has strengthened the case for a Bank of Canada (BoC) interest rate cut and could further undermine the best performing major currency of 2019 in the weeks ahead. 

The Pound-to-Canadian-Dollar outlook has turned bullish across all axes on the charts, according to strategists at Scotiabank, priming it for an extended move higher that could ultimately take the British currency back to levels not seen since March earlier this year.

Studies of the GBP/CAD charts show the pair to be in an established short-term uptrend which has run into tough resistance but will probably overcome it in time.

The Canadian Dollar stabilised Thursday despite after economic growth figures surprising on the downside for August and amid mounting fears for the U.S.-China trade ceasefure, after a third 2019 interest rate rate cut from the Federal Reserve (Fed) enabled the Loonie to claw back ground previously lost to its U.S. rival.

The surprisingly negative shift in stance by the Bank of Canada at their October policy meeting may have been a strategic attempt to weaken the Canadian Dollar, which has been one of the G10’s best-performing currencies this year, and some might argue has got too strong for its own good.

The Canadian Dollar slumped against the its British and U.S. rivals Wednesday after the Bank of Canada (BoC) surprised an offguard market by hinting that an interest cut could be imminent given the slowing U.S. and global economies, which pose a risk to Canada's economic and inflation outlooks.

The Pound-to-Canadian-Dollar rate is consolidating recent gains and although there may still be bumps in the road ahead, it's tipped by analysts at Scotiabank to draw fresh buyers upon any dips lower in the weeks ahead, as the UK heads for its third general election inside five years.