GBPCAD Plunges on Dovish BoE Vote, Rising Crude Oil Prices

The GBPCAD is trading lower today on the back of diverging fundamentals affecting the component currencies. The commodity-based Canadian Dollar is benefitting from an uptick in crude oil prices, which is trading above $57 after key players signaled a possible OPEC cut.

On the other hand, the British Pound is on offer after it emerged from the Bank of England monetary committee meeting that 2 members voted for a rate cut in an unexpected dovish move.

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Technical Outlook for GBPCAD

This pair is not one of the commonly traded pairs, but usually brings good opportunities if the fundamentals affecting the paired currencies are divergent as is the case currently.

The GBPCAD is presently trading 60 pips lower than is intraday high. It had dropped to as low as 1.68509 on the day, but has pulled back up to 1.68779 after finding support at 1.68509 (S3 pivot). This is also where the down trendline that connects price lows from Nov 4 to date intersects with the S3 pivot. Price is now challenging the S2 pivot price of 1.68863.

A break above this level continues the price pullback, as the pair seeks a good point for reneweed selling on the rally. The previous support-turned resistance of 1.69173 (cluster of lows between November 5 -7) could be a possible target for this to occur.

A break below 1.68509 targets the October 17 and October 23 daily lows of 1.68125. This move would have to break the down trendline with a decisive close for this target to be achieved.

GBPCAD price chart

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