GBP/CAD Outlook: Time Running out for GBP/CAD

The Canadian Dollar remains dominant and the GBP/CAD exchange rate needs to make a break higher to give it any hope of avoiding a decline towards 1.50 says a leading strategist.

Canadian Dollar strength and renewed hard-Brexit fears have ensured the GBP/CAD remains pointed lower.

At the time of writing the pair is quoted at 1.6097 on the inter-bank markets.

Declines in GBP/CAD come as oil prices recover above $50 a barrrel and reenergise the Canadian currency.

CAD has been ascending through October thanks to rising oil prices following the agreement between non-OPEC member Russia and OPEC to multi-laterally reduce production so as to increase the price of oil.

Despite GBP/CAD's chart ostensibly looking extremely bearish after many down-days in a row, the long bullish hammer which formed after the flash crash is a sign the pair is potentially in a recovery mode.

These sorts of extremely long hammers often happen at the end of downtrends and mark exhaustion.

Although the pair has still not shown signs of recovery since Friday, and the MACD momentum indicator is still firmly bearish. 

Only a break above the 1.6500 level would open the door to a move higher to 1.7000.

Scotiabank’s Osborne: Time Running Out for the Pound

A less-bullish view is supplied by Scotiabank’s FX Strategist Sean Osborne, who questions the validity of the spike lower.

“The spike lower last week occurred in unusual circumstances (thin trading early in the Asian session) and there is rightly some focus on whether the price action provides any valid insight from a technical point of view,” comments Osborne.

The Scotiabank Strategist sees 1.66 as critical; with a break above required soon to reassert the uptrend.

“The clock is running against the GBP from here; unless there is a quick and sustained recovery back above 1.66 (note, major short-term resistance at 1.7035/40 now), we think the loss of support at 1.66 will mean further weakness back to the 1.50/1.55 range (lows seen in 2010/13).”

Latest Pound / Canadian Dollar Exchange Rates

	Live: 1.8597▼ -0.02% 12 Month Best: 1.8915
*Your Bank's Retail Rate	1.7965 - 1.8039
**Independent Specialist	1.8337 - 1.8411 Find out why this is a better rate

* Bank rates according to latest IMTI data.

** RationalFX dealing desk quotation.