Missed the bullish breakout on GBP/CAD?
Better keep your eyes on this area of interest in case a retest happens and the trend resumes.
Take a look at these inflection points I’m watching on the 4-hour time frame:
GBP/CAD 4-hour Forex Chart by TradingView
Dovish rhetoric from the Bank of Canada (BOC) highlighting the possibility of more interest rate cuts are dragging the Canadian currency south these days.
On the flip side, expectations that the Bank of England (BOE) could keep monetary policy unchanged for the time being are keeping sterling supported.
What will the upcoming Canadian CPI report and U.K. inflation data mean for this pair?
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your homework on the British pound and Canadian dollar, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
GBP/CAD has recently busted through the strong ceiling at the 1.7825 mark and zoomed up to a high of 1.7965 before pausing from its climb.
A correction from this rally could take the pair down to the former resistance area right around the 50% Fib or the 100 SMA dynamic support closer to the 61.8% level and pivot point (1.7800).
Additional volatility is expected right around the release of the U.K. CPI figures, as the results will probably shape expectations for the BOE decision later in the week.
Be ready for a shallow dip to the support at R1 (1.7900) which lines up with a major psychological mark or a break above the latest highs at R2 (1.7970) if pound bulls are too eager to charge!
Don’t forget to practice proper risk management and stay aware of top-tier market catalysts when trading this one.