GBP/CAD in the spotlight following recent 1.7675 high

Justin Freeman

The British pound went up to a strong position against the Canadian dollar last week, reaching 1.7675 at one stage.

It then dropped somewhat – but overall, it had a positive week in this pair, as it did in many other pairs.

It managed to conclude the week up by just over two whole percentage points in its pair against the loonie.

In terms of technical indicators, the underlying signs look positive for the currency.

Its Relative Strength Index for its Canadian dollar pair, for example, went up and up – suggesting that there is high underlying demand for the currency.

By Monday, analysts were predicting good things for the currency.

One suggestion even forecast that the currency could surge to 1.8097 over the day – though this remained a mere possibility, based on predicted monthly resistance levels.

As the day unfolded, meanwhile, some strategists also suggested that the currency could go down as far as 1.7315 in short-term trading if a bullish tendency took hold.

Moving to fundamental analysis, meanwhile, the pound faces a number of challenges later this week and into next week.

Friday morning will see a house price release from Halifax, one of the country’s major lenders.

This release, which will cover July and which is due out at 7:30am GMT, was last recorded at -0.1% on a month-on-month basis.

Looking ahead to next week, meanwhile, Monday will see the British Retail Consortium (BRC) release its like-for-like retail sales figures.

This release is due just after 11pm GMT and is expected to show a significant year-on-year drop for July.

According to analysts, the forecast is a move from 10.9% to 7.6%.

On Tuesday of next week, meanwhile, the country’s employment rate for June is due out at 8:30am GMT.

This, at least, is likely to help bolster the sentiment of bulls who are hoping for good news.

It is due to show no change from its previous position of 3.9%.

These figures are set to come from National Statistics.

Also out in this time slot will be a claimant count rate for July.

This is expected at 8:30am GMT and was last recorded at 7.3%.

This measure is also an assessment of unemployment in the country, and is sure to be closely monitored by traders to see what the underlying state of the country’s labour market looks like.

On Wednesday of next week, manufacturing production figures for the month of June will be out at 6am GMT.

Month on month, these were last recorded at 8.4%.

However, it will be the preliminary gross domestic product figures for Q2 2020 that are likely to have the most risk of moving the markets.

Here, the figure is forecast to move from -1.7% to -1.6% when they come out at 6am GMT.

Justin Freeman

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