GBP/CAD is having trouble extending a downswing despite the release of a CAD-bullish report.
Will this lead to the pair extending a weeks-long uptrend?
We’re looking at the daily chart for more clues:
GBP/CAD: Daily
GBP/CAD Daily Forex Chart by TradingView
In case you missed it, Canada just dropped its May CPI figures which showed faster-than-expected consumer price increases in May.
Other inflation measures also came in hotter than market estimates, which lowered the odds of another Bank of Canada (BOC) rate cut and encouraged CAD demand.
GBP/CAD barely reflected the CAD-bullish event, however. The pair remained at the 1.7325 zone, which is near the 1.7295 Pivot Point line and the 38.2% – 50.0% Fibonacci retracement levels.More importantly, GBP/CAD can’t seem to make new lows below a major resistance area from late 2023.
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your fundie homework on the British pound and the Canadian dollar, then it’s time to check out the economic calendar and stay updated on daily fundamental news!Will the lack of follow-through on CAD-buying lead to an uptrend for GBP/CAD?
Note that the pair made higher highs and higher lows since finding support at 1.6900 in May. If the pair draws enough bullish pressure around the potential pullback zones, GBP/CAD may revisit its 1.7400 inflection point if not the 1.7600 previous highs.
Of course, GBP/CAD bears may also be gearing up for further losses.
If higher crude oil prices and not-so-dovish BOC sentiments continue to prop up Loonie demand, GBP/CAD could trade below 1.7300 and head for previous areas of interest like 1.7000 or 1.6900.