- Pound is under pressure on Monday, holds onto daily losses.
- Loonie pulls back during the American session versus other commodity currencies amid improvement in risk sentiment.
The GBP/CAD pair bottomed on Monday at 1.7046 and the rebounded rising to 1.7165. As of writing, it trades at 1.7135, almost 150 pips below Friday’s close. The key driver has been the decline of the pound across the board affected by the new strain of COVID-19 in the UK and the lack of agreement between the European Union and the United Kingdom regarding their future commercial relationship after December 31.
The pound tumbled as more countries cancelled flight to the UK on reports of a highly contagious coronavirus strain in the UK. Also, the government announced more restrictions and affected market sentiment globally. Markets received a relief after US lawmakers agreed on a new stimulus package.
The Dow Jones is falling by 0.35% after being down by almost 3% earlier on Monday. The improvement in risk sentiment helped the pound that trimmed losses across the board but still heads for important losses and remains under pressure.
From a technical perspective, GBP/CAD is now with a bearish bias in the 4-hour chart with the price under the 20-SMA. A recovery above 1.7200 would alleviate the negative pressure. The next resistance stands at 1.7290/1.7300. On the flip side, the immediate support is located at 1.7100 followed by the daily low at 1.7040.
A close around current level in GBP/CAD would confirm the slide back under the 20, 55 and 100-day moving average. On a wider perspective, while above 1.6750/1.6800 the bias will remain sideways.
Technical levels
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD drops below 1.0800 after German Retail Sales data
EUR/USD has come under fresh selling pressure and trades below 1.0800 after the data from Germany showed that Retail Sales declined by 1.9% MoM in February. Resurgent US Dollar demand is adding to the downside in the pair. US data are next in focus.
GBP/USD stays weak near 1.2600 amid market caution
GBP/USD remains defensive near 1.2600 in European trading on Thursday. The hawkish tone from Fed Governor Christopher Waller keeps the US Dollar afloat amid a cautious trading environment ahead of key US data releases and the Good Friday trading lull.
Gold price bulls keenly await US PCE Price Index on Friday before placing fresh bets
Gold price (XAU/USD) continues with its struggle to make it through the $2,200 mark on Thursday and oscillates in a narrow trading band through the early part of the European session.
XRP price falls to $0.60 support as Ripple ruling doesn’t help Coinbase lawsuit against SEC
XRP programmatic sales ruling by Judge Torres was completely rejected by another US Court that ruled in favor of the SEC in a lawsuit against Coinbase.
Portfolio rebalancing and reflation trades emerge into Q2
Yesterday’s price action pointed at a possible end-of-quarter portfolio rebalancing as the session saw the laggards of the quarter like Apple and Tesla gain, and the stars like Microsoft and Nvidia retreat.