Will 1.72 act as a resistance for GBP/CAD rate once again?

GBP/CAD forecast - Will 1.72 act as a resistance for GBP/CAD rate

The Pound is having a upward push this week against a raft of major currency pairs, owing to positive sentiment surrounding the Brexit once again. Yesterday we saw the GBP/CAD rate break into the 1.72’s and this morning the pair is once again trading in the 1.72’s after falling as low as 1.7176 in the early hours of trading.

Those of our readers watching the Pound to Canadian Dollar rate will be aware that the pair have struggled to break north of 1.72 previously, with 1.72 being the upper level and 1.66 being the lower level of the current trend. GBP/CAD bounced off of 1.72 in early October before dropping to 1.66 towards the end of the month. The GBP/CAD rate is now sat at 1.72, so the current trend is quite obvious.

GBP/CAD rate to be driven by Brexit news

Personally I think it’s going to take a Brexit breakthrough to push the GBP/CAD rate higher, and that could come this month if Brexit Secretary, Dominic Raab’s recent comments are anything to go by. He has previous suggested a deal could be announced this month and this week he said the Conservative Government’s behind closed doors talks regarding the outstanding issues were positive.

In regards to the Canadian Dollar, the currency has been under less pressure since the new NAFTA agreement between the North American countries was announced. The new deal is called USMCA and it was agreed at the beginning of October and this paves the way for the Bank of Canada to carry out monetary policy changes if they’re needed, as any uncertainty for Canada has been removed.

Lower oil prices holding back CAD

On a less positive note the price of oil has fallen recently, and this ties into the CAD’s value as oil is a key export for the country. The US has reimposed sanctions on Iran and this has caused the drop in oil value.

The next economic data release that could influence the GBP/CAD rate comes out on Friday and covers the UK’s economic output during the 3rd quarter of this year. I expect the data to be followed closely by the markets as usual, as the UK is going through an uncertain time and any slowdowns are likely to have an impact on the Pound’s value. If you wish to be updated in the event of a major market movement, do feel free to register your interest with us.

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