GBP/CAD fails to extend beyond 1.6650 and retreats to 1.6620
|- Pound's rebound from 1.6540 is capped at 1.6650.
- The sterling remains weak against the commodity-linked CAD.
- GBP/CAD seen appreciating towards 1.6950 – Scotiabank.
Sterling’s recovery attempt from multi-year lows at 1.6540 seen earlier today has been capped about 110 pips higher, at 1.6650, before pulling back to the 1.6620 area.
Higher oil prices are supporting the CAD
The pound has been unable to post a significant recovery as the Canadian dollar remains fairly strong with oil prices picking up from weekly lows.
The lack of progress in the talks between Russia and Ukraine and the warning from the International Energy Agency (IEA) that the decline in global demand caused by higher prices will not offset the shut-in of Russian supplies have renewed concerns about a crude shortage, which has boosted the commodity-linked CAD against its most majors.
Earlier today, the pound has been showing weakness, weighed by Thursday’s dovish statement by the Bank of England. The bank hiked interest rates as widely expected, although the tone of its monetary policy statement was considered tilted to the dovish side, which triggered a broad-based GBP weakness.
GBP/CAD expected to appreciate towards 1.6950 – Scotiabank
From a technical perspective, FX analysts at Scotiabank see the pair rallying towards 1.6950 over the coming months: “We remain of the view that GBP/CAD looks relatively ‘cheap’ here, near the base of the sideways range that has persisted since 2020, and we look for GBP gains through 1.6950 to trigger additional strength back to the low 1.70s.”
Technical levels to watch
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.