GBP/CAD moves up on the watchlist for a potential short-term play on the upcoming update on Canadian jobs data. Will volatility rise and keep the downtrend going?
Before moving on, ICYMI, today’s Daily U.S. Session Watchlist looked at an opportunity forming on EUR/USD ahead of the ECB statement, so be sure to check that out to see if there is still a potential play!
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Fresh Market Headlines & Economic Data:
Upcoming Potential Catalysts on the Economic Calendar
Japan BSI Large Manufacturing at 11:50 pm GMT
Australia New Home sales at 4:00 am GMT (Mar. 12)
German Final CPI at 7:00 am GMT (Mar. 12)
U.K. GDP, Trade Balance, Manufacturing Production at 7:00 am GMT (Mar. 12)
U.K. Consumer inflation expectations at 9:30 am GMT (Mar. 12)
Euro area Industrial Production at 9:30 am GMT (Mar. 12)
What to Watch: GBP/CAD
On the one hour chart above of GBP/CAD, we can see the pair has been in somewhat of a sideways pattern, likely a battle between both Loonie and Sterling bulls trying to price in the pandemic recovery, more specifically the re-opening of the U.K. economy (favoring the pound) and the recent rise in oil prices (favoring the Loonie).
Overall the bias seems to lean in favor of the Loonie, and with a potential update showing a recovery in Canadian jobs tomorrow, that bias may accelerate in favor of CAD.
We’ve also got low tier updates from the U.K. during the London session, which could bring some action to Sterling. If those updates disappoint while the CA data comes in positive, we’re watching out more bearish movements in GBP/CAD for a potential swing position.
If we see bearish reversal pattern from the Fib levels, that could draw in technical sellers to play the trend lower. But with resistance already formed at the Fibs, a short biased trader may want to consider scaling up to that resistance area to lower the risk of completely missing out on the move if the pair continues lower from current levels.