GBPCAD Hits Target 1 as Oil moves up

GBPCAD, Daily              

The pound has settled following its recent two-week period of underperformance. The Fed’s less hawkish than anticipated guidance has given Cable a prop but the rally in the Oil price has helped the CAD tick up and the GBPCAD SHORT trade to reach Target 1 (1.7022). This 180 pip gain from the entry on Tuesday (September 20) takes the net gain for the four GBP positions to 954 pips this month.

The oil price has been a major mover in the last few days and again today it is up another 1%, reflecting in part the generally weaker dollar and in part by the risk-on vibe that the Fed’s less hawkish than expected stance generated. The Brent future benchmark (UK Oil) is presently showing a 0.9% gain, at $47.24 and the WTI (USOil) at $45.89. This takes the week-on-week gain to 1.4% while month-on-month, oil prices are still down by 5.4%, reflecting bigger-picture markets concerns of the supply glut lasting into 2017. Next weeks meetings at the 15th International Energy Forum (IEF15) in Algiers may involve formal rather than informal talks between OPEC and non-OPEC countries. Bloomberg reported that the cartel is looking to cut crude supplies by 1 million barrels a day to re-balance markets and stabilize prices.