Pound-to-Canadian Dollar Week Ahead Forecast: Anchored Mid-range

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GBP/CAD looks set to retain support above a key technical level in the coming days, with price action suggesting the pair is settling back into the heart of its longer-term range.

The pound to Canadian dollar exchange rate slipped to 1.8570 on Monday after retreating for a second consecutive week, unwinding earlier gains without signalling a decisive shift in trend.

The move brings GBP/CAD back into the centre of the 2025–2026 trading zone, an area that has repeatedly acted as a magnet for price during periods of uncertainty.

Crucially, the 200-day exponential moving average is nearby at 1.8495, and last week’s decline stalled ahead of this level, confirming it as an area of underlying support.

As long as the pair holds above the 200-day EMA, the technical picture argues against the emergence of a meaningful trend in either direction.

Instead, the level is likely to attract and the balance of risks points toward a period of range trading, with a gentle drift lower possible if the recent recovery in the U.S. dollar extends.

A firmer dollar backdrop would typically weigh on GBP/CAD, and it's worth pointing out that February is traditionally a very good month for the dollar.

Domestically, downside risks would increase if political uncertainty in the UK were to intensify.

Investors remain alert to developments surrounding Keir Starmer, amid speculation that his position could come under pressure.

Over the weekend, his closest ally, Morgan McSweeney, resigned as Chief of Staff, reviving memories of past episodes of political instability in the UK.

For market participants familiar with recent British political cycles, the departure of senior aides has often marked the beginning of a broader loss of authority.

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Even if Starmer remains in office, there are concerns he may need to shift policy leftwards to placate restive MPs within the Labour Party, a move that markets tend to associate with weaker fiscal credibility and less reform-friendly policy.

However, Starmer continues to command a comfortable parliamentary majority, making him difficult to unseat in the near term.

There is therefore a reasonable chance that the current intrigue fades, allowing sterling to regain composure.

Looking further ahead, the next potential flashpoint for the pound is May’s local government elections, where Labour is widely expected to suffer significant losses, an outcome that could reopen questions around leadership and direction.

For now, though, GBP/CAD appears anchored mid-range, with technical support intact and no immediate catalyst to force a break in either direction.