The GBP to CAD rate enters the new month having found a modicum of support in the form of the 1.85 level. However, the outlook remains skewed in favour of the Canadian unit.
The pound to Canadian dollar exchange rate took a dive in the wake of news Canadian economic growth numbers blew analyst expectations.
There has since been a recovery in sterling’s position, but to us it looks unconvincing.
A slew of technical indicators on the exchange rate’s daily historical charts are advocating for further losses.
Indeed, “GBPCAD retains a soft undertone. The cross is still in consolidation mode and price signals remain equivocal on the directional risks from here,” says analyst Shaun Osborne at Scotiabank.
The declines in March have not been as frantic as those witnessed in January and February, nevertheless the drift lower remains intact.
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However it must be respected that GBP is finding consistent support around 1.85 in the past two weeks.
“Trend strength signals are bearishly aligned across a range of timeframes again and that tips the balance of risks towards a resumption of the broader bear trend,” says Osborne.
The GBP has reached Scotiabank’s long-held bear target of 1.8515 but analysts remain wary of a downside over-shoot towards 1.78/1.80.
