GBP/CAD falls to weekly lows

The GBP/CAD cross plummeted to a fresh weekly low of 1.8547 and trades barely above it at the end of the day, as the Canadian dollar was propelled by a strong recovery in oil prices.

Brent closed the day 3.0% higher, while WTI advanced 3.5% to regain the 46.00 level, following news of a large draw-down in US stockpiles. According to the EIA report, crude inventories fell by 3.4 million barrels last week, sending WTI futures roughly 3.5% higher, offsetting news that Canada is resuming output after the wildfires that forced a shutdown in local production.

GBP/CAD technical view

“The short-term outlook for the cross turned bearish, as in the 4 hour chart the technical indicators head north within negative territory, whilst the price is now below a bearish 20 SMA. The price however, stalled its decline around the 200 EMA, now at 1.8545 and the immediate support,” said Valeria Bednarik, chief analyst at FXStreet. “In the 1 hour chart, the technical indicators are posting modest bounces from near oversold territory, in line with some short term advances. Nevertheless, if the price holds below the 1.8640 region, the risk will remain towards the downside, looking for fresh lows near the 1.8400 region.”

Support levels: 1.8545 1.8480 1.8430. Resistance levels: 1.8590 1.8640 1.8686.