GBP/CAD is having trouble extending the downtrend despite a bullish CAD report.
Will this extend the pair’s weeks-long upward trend?
We look at the daily chart for more evidence:
GBP/CAD Forex Daily Chart by TradingView
In case you missed it, Canada just dropped its May CPI numbers which showed faster-than-expected increases in consumer prices in May.
Other inflation measures also came in hotter than market estimates, reducing the odds of the Bank of Canada cutting interest rates again and encouraging demand for the Canadian dollar.
However, the GBP/CAD pair barely reflects the bullish event for the Canadian dollar. The pair remained at the 1.7325 area, near the 1.7295 pivot point line and the 38.2% – 50.0% Fibonacci retracement levels.
More importantly, the GBP/CAD pair does not appear to have made new lows below the key resistance area as of late 2023.
Remember that directional biases and volatility conditions in market prices are usually driven by fundamentals. If you haven’t done your financial homework on the GBP and CAD yet, it’s time to check the economic calendar and stay up to date with daily essential news!
Will failure to continue buying the Canadian dollar lead to an uptrend for GBP/CAD?
Note that the pair has been making higher highs and lower lows since finding support at 1.6900 in May. If the pair draws enough upward pressure around potential pullback areas, GBP/CAD could revisit its inflection point at 1.7400 if not its previous highs at 1.7600.
Of course, GBP/CAD bulls may also be bracing for further losses.
If higher crude oil prices and less cautious Bank of Canada sentiment continue to support demand for the Canadian dollar, GBP/CAD could trade below the 1.7300 level and head towards previous areas of interest such as 1.7000 or 1.6900.