GBPCAD has been trending lower, moving below a descending trend line connecting the latest highs of price action on the 1-hour time frame. Price just bounced off the support near the 1.8100 handle and is pulling back to the trend line.
Using the Fib tool on the latest swing high and low shows that the 50% level lines up with the trend line and might hold as resistance. This is also near the 200 SMA, which usually holds as a dynamic resistance level.
The 100 SMA is below the longer-term 200 SMA so the path of least resistance is to the downside. If the descending trend line keeps gains in check, price could head to the previous lows or create new ones. On the other hand, a higher pullback could last until the 61.8% level at 1.8500. A break past this area could mean a reversal for GBPCAD.
The Doha meeting over the weekend failed to produce a deal to cap production and boost prices. Because of that the oil-related Canadian dollar gapped down against its forex counterparts, with traders anticipating further declines for the commodity.
Meanwhile, the UK has a couple of top-tier reports due this week. These are the jobs figures for March and the retail sales report. Analysts are expecting to see an 11.9K drop in joblessness and no change in wage inflation. Consumer spending in the UK is expected to fall by 0.1%. Stronger than expected data could mean more gains for GBPCAD while weak readings could allow the selloff to resume.
As for CAD, crude oil trends could continue to push the currency around since the top-tier reports from Canada aren’t due until Friday. These are the CPI and retail sales figures.
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