GBPCAD is expected to continue its short-term rebound.1. The GBPCAD currency pair is currently reversing its oversold conditions.
In the upcoming week, GBPCAD is expected to continue its short-term rebound, with a focus on the release of Canada's monthly labor market statistics.
It has potential for consolidation in the next five days due to oversold conditions on the daily chart.
According to Shaun Osborne, an FX strategist at Scotiabank, short-term rebounds for GBP may be limited to the mid/upper 1.65s, with major resistance seen around 1.6850/60.
Osborne suggests that a clear push above the upper 1.68s is needed for GBP to stabilize more broadly at this point.
The potential for GBPCAD to reach levels near 1.68 could depend on the performance of the Pound-Dollar exchange rate, as the Canadian Dollar closely tracks the U.S. dollar, resulting in GBPCAD retracing in line with GBP/USD.
2. There is potential for additional technical gains anticipated for this week.
From out indicator , both MA changed color from Red to Blue, in most of case, it tells us, the chart is changing from down trend to up trend/ from down trend to consolidation.
So it you have Short Positions on hand, it is the time to take profit.
On the order hand, it is the right time to establish Long Position of GBPCAD if you believe there is a technical rebounce for few days as a Swing trade strategy.
We mark three key levels of GBPCAD on daily chart for your reference.
Key Support Level is 1.6597.
Key Resistance Level are 1.6699 and 1.6870.
For us, we are running our Trading Rot for Algo trading GBPCAD and other CAD currency pairs(such as Short: CADJPY and CADCHF; Long: NZDCAD, EURCAD and USDCAD) which benefits from CAD turns to down side from Overbought.
3. The focus is expected to be on Canadian labor market statistics, which will hold significant importance.
Learning about the CAD Dollar:
Some common economic reasons that could contribute to a shift from a strong to a weak trend for a currency:
a) Interest Rate Differentials: Changes in interest rates can impact a currency's strength. If a country's central bank lowers interest rates or signals a more dovish monetary policy, it can lead to reduced demand for the currency and potentially weaken its value relative to other currencies.
b) Economic Growth and Performance: A weakening economic outlook or slower economic growth can negatively affect a currency. Factors such as declining GDP growth, rising unemployment, or weak economic indicators can contribute to a currency's weakness.
c) Trade Balance and Current Account: A persistent trade deficit or a deteriorating current account balance can put downward pressure on a currency. If a country imports more than it exports or experiences a net outflow of capital, it can lead to a weaker currency.
d) Commodity Prices: Canada is a major exporter of commodities like oil, natural gas, and metals. Fluctuations in commodity prices can have a significant impact on the Canadian dollar. A decline in commodity prices may weaken the CAD as it affects export revenues and the overall economic outlook.
e) Political and Geopolitical Factors: Political instability, changes in government, or geopolitical tensions can impact a currency's strength. Uncertainty or negative developments in these areas can undermine investor confidence and lead to a weaker currency.
It's important to note that currency trends are influenced by multiple factors, and the interplay of these factors can be complex. It's always recommended to consult up-to-date economic data and analysis to get a more accurate understanding of the specific reasons behind any recent shifts in the strength or weakness of a currency like CAD.
Thank you for your kind attention.
Good luck!
See you next update.
