GBP/CAD hits 10-month lows sub-1.8700

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Mar 1, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
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    As expected, the GBP/CAD cross resumed its decline, this time led by a stronger Canadian dollar that appreciated on the back of stronger oil prices.

    The commodity has not only stabilized, but WTI futures also extended up to $34.74 a barrel this Tuesday, a fresh 5-week high. Also, supporting the CAD was a much better-than-expected Canadian GDP reading for the last quarter of 2015, showing the economy grew 0.8% against expectations of 0.0%.

    GBP/CAD fell down to a 10-month low of 1.8673 during the American session, with subsequent bounces capped around 1.8740, the immediate resistance. At time of writing, the pair is trading at 1.8699, 0.77% below its opening price.

    GBP/CAD technical perspective

    “Short term, the 1 hour chart supports some further declines, as the price is below a bearish 20 SMA, whilst the technical indicators remain well below their mid-lines, although lacking directional strength,” said Valeria Bednarik, chief analyst at FXStreet. “In the 4 hours chart, the price briefly advanced above its 20 SMA, but quickly fell back below it, while the technical indicators lack directional strength within negative territory, suggesting the cross may consolidate before resuming its slide.”

    Support levels: 1.8670 1.8630 1.8590 Resistance levels: 1.8740 1.8790 1.8850.
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