GBP/CAD's rally from 1.5655 reaches three-month highs above 1.5800


  • The pound bounces up on Friday to retest the 1.5800 support area.
  • Lower oil prices and a dovish BoC have hit the CAD.
  • GBP/CAD: Above 1.5800, the pair eyes 1.6000 area.

The British pound has performed a surprising comeback against the Canadian dollar on Friday, bouncing up from the 1.5655 area to reverse Thursday’s decline and explore levels past 1.5800 for the first time since late June.

The CAD remains under pressure after BoC’s dovish hike

The Bank of Canada surprised the markets on Wednesday, hiking rates by "only" 50 basis points, against expectations of a 0.75% move. Furthermore, the bank's statement signaled the end of the tightening path on the back of the gloomy global economic prospects, which sent the Canadian dollar lower across the board.

Beyond that, the sluggish performance of crude prices, Canada’s main export, has increased pressure on the loonie. The US benchmark WTI oil is trading about 0.5% lower on the day, nearing $88.00 after having peaked at $89.70 on Thursday.

In the UK, the appointment of Rishi Sunak as the UK’s Prime Minister has kept the GBP moderately bid over the past few days. The pledge to restore economic stability at his first speech has calmed investors, spooked as they were by his predecessor’s economic plan.

GBP/CAD: Above 1.5800, the pair might reach the 1.60 area

A confirmation above 0.5800 is likely to strengthen the bullish bias and push the pair toward 1.5970 (the 200-day SMA) ahead of the 1.6000 psychological level and June’s peak.

The pair, however, might take a breather after a nearly 400-pip rally this week. Immediate support lies at 1.5645 (October 27 low) and then, the 100-day SMA at 1.5435. A reversal below this level would cancel the positive bias and open the path toward October 21 low at 1.5315.

Technical levels to watch

USD/CAD

Overview
Today last price 1.3607
Today Daily Change 0.0042
Today Daily Change % 0.31
Today daily open 1.3565
 
Trends
Daily SMA20 1.3708
Daily SMA50 1.3418
Daily SMA100 1.3163
Daily SMA200 1.2933
 
Levels
Previous Daily High 1.3627
Previous Daily Low 1.3496
Previous Weekly High 1.3885
Previous Weekly Low 1.363
Previous Monthly High 1.3838
Previous Monthly Low 1.2954
Daily Fibonacci 38.2% 1.3577
Daily Fibonacci 61.8% 1.3546
Daily Pivot Point S1 1.3498
Daily Pivot Point S2 1.3432
Daily Pivot Point S3 1.3368
Daily Pivot Point R1 1.3629
Daily Pivot Point R2 1.3693
Daily Pivot Point R3 1.376

 

 

 

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