GBP/CAD goes south toward 1.6820 amid Brexit risks
- GBP/CAD gravitates downward, UK GDP data did not underpin.
- The pair needs substantial gains to continue its northward journey.
- GBP/CAD faces tough resistance, could likely extend the downtrend.
GBP/CAD has been at its lowest since the beginning of the year; at the time of writing, trading at 1.6820 during the Asian session on Friday. The cross-currency pair was last seen trading at similar levels near June 2020 troughs.
Weaker than expected UK macroeconomic data for the July-September period, which the investors slightly ignored, has weighed slightly on GBP/CAD. Along with this, uncertainty hovering around Brexit negotiations, including the growing talks of the European Union (EU) suspending its trade deal, may continue to dampen the sterling. However, the impact may not be as strong as it has been so far.
On the other hand, USD/CAD is trading positively on the back of the strong US dollar as inflation data revives bets of tighter monetary policy, cushioning the downside in the cross.
The data on US consumer prices, released on Wednesday, has exceeded economists’ expectations and the treasury yields have rebounded, trading at 1.57%, at the time of writing.
Ahead of a light economic calendar, with traders still reeling from US inflation and UK GDP figures, Bank of England’s (BoE) Jonathan Haskel speech will be awaited for some trading incentives.
GBP/CAD Technical Levels
After paring little gains on Thursday, the pair remains stuck with bearish vibes, eyeing weekly-low 1.6732 as support. Further south, it will find a monthly low of 1.6891.
The journey north remains a challenge with Simple Moving Averages (SMAs) like 21, 50, 100, putting thorns at 1.6942, 1.7138 and 1.7233, respectively.