GBPCAD was 0.25% higher as Boris Johnson gets set to address markets on the next steps for the U.K. with Brexit. The country’s Prime Minister had threatened to walk away from talks in mid-October if an agreement hadn’t been reached but it looks likely that the threat has receded and another delay is the likely outcome.
Britain will leave the EU on January 1st 2021 and an agreement is needed on a deal in order to allow time for it to be legally drafted, and also to implement any domestic changes in areas such as fishing or ports. Both sides have the best part of two months to formalize a deal but the virus chaos is not helping the process.
Oil prices are holding steady near $40.00 and this has boosted the Canadian dollar, however, the threat of further lockdowns could be an issue for crude. If demand begins to wane on increased restrictions then the planned production cut by OPEC in December may have to be cancelled.
Next week will be key for the pair as the U.K. and Canada both release inflation figures. Core inflation for the U.K. is expected to come in at 1.1% which would be a rise of 0.2% on last month. The same indicator came in at 0.8% for Canada in August and traders will look for any clues in the two numbers that could see central bank action.
GBPCAD Technical Outlook
GBPCAD is still trading in a range between the 1.6800 support and the resistance from 1.7500 to 1.7800. The pair trades under the 50-day ma which would favor the downside for now but a close above 1.7200 could change that. If you require assistance with risk/reward and trade entry, then please consider the Investing Cube Forex Trading Course or one-to-one coaching.
GBPCAD Daily Chart