Loonie Charges, Pound Seeks Rebound

The GBPCAD pair finds itself caught between cautious optimism and persistent downtrend pressure in the pre-holiday market. Recent UK retail sales data surprised on the upside, offering a glimmer of hope for the British economy.  

However, softer GDP growth and ongoing political uncertainty continue to weigh on the Pound. Meanwhile, the Canadian Dollar benefits from hawkish expectations surrounding the Bank of Canada due to elevated inflation. This divergence in central bank outlooks fuels the bearish bias in the GBPCAD, but softening oil prices provides some counterbalance. 


The GBPCAD currently hovers at 1.67879 within a descending channel. Key moving averages, the 20-SMA (green), 50-SMA (blue), and 100-SMA (orange), all slope downwards, reinforcing the bearish trend. However, a flat RSI (33.05) suggests potential price stability. 

Short-term trading opportunities could exist towards the initial resistance at 1.68414 if the upward momentum is sustained. A break above this level would open doors towards 1.68990. Bears, on the other hand, might push the price towards the initial support at 1.67564. A break below this level could trigger further declines towards 1.67062. 


The GBPCAD pair navigates a complex environment with GBP influenced by political instability and BoE decisions, while CAD gains strength from robust inflation and a hawkish Bank of Canada.  

Technicals suggest potential short-term movements and market sentiment adds an extra layer of uncertainty. 

Sources: TradingView, Reuters. 

Piece written by Mfanafuthi Mhlongo, Trive Financial Market Analyst 

Disclaimer: Trive South Africa (Pty) Ltd, Registration number 2005/011130/07, and an Authorised Financial Services Provider in terms of the Financial Advisory and Intermediary Services Act 2002 (FSP No. 27231). Any analysis/data/opinion contained herein are for informational purposes only and should not be considered advice or a recommendation to invest in any security. The content herein was created using proprietary strategies based on parameters that may include price, time, economic events, liquidity, risk, and macro and cyclical analysis. Securities involve a degree of risk and are volatile instruments. Market and economic conditions are subject to sudden change, which may have a material impact on the outcome of financial instruments and may not be suitable for all investors. When trading or investing in securities or alternative products, the value of the product can increase or decrease meaning your investment can increase or decrease in value. Past performance is not an indication of future performance. Trive South Africa (Pty) Ltd, and its employees assume no liability for any loss or damage (direct, indirect, consequential, or inconsequential) that may be suffered from using or relying on the information contained herein. Please consider the risks involved before you trade or invest.