BOC’s Poloz is up later today, and I think GBP/CAD is presenting a good opportunity in case we see volatility for the Loonie…
Currency Snapshot:
Fresh Market Headlines & Economic Data:
- Oil gains more than 3% following inventory data, rising tensions in Middle East
- FOMC minutes show rates on hold, little hurry to change course
- Fed is looking at a ‘standing repo’ operation to handle overnight funding issues
- Fed is looking into developing a digital currency in the US, Powell confirms
- New Zealand’s credit card spending eases from 4.7% to 2.5% from a year ago in October
- Indices of all industry activity in Japan improves from 0.0% to 1.5% in September
Upcoming Potential Catalysts on the Forex Calendar:
- U.K.’s public sector borrowing at 9:30 am GMT
- ECB’s meeting minutes at 12:30 pm GMT
- Canada’s ADP non-farm employment change at 1:30 pm GMT
- U.S. Philly Fed manufacturing index at 1:30 pm GMT
- BOC Governor Poloz to give a speech in Toronto at 1:40 pm GMT
What to Watch: GBP/CAD
Details on the Fed’s decision to hold its policies steady after cutting its rates aggressively emphasized that the Bank of Canada (BOC) may have some catching up to do.
If you recall, the central bank has kept its rates steady even as its neighbors are easing their monetary policies left and right. It also doesn’t help that Canada’s economic data point to the need for monetary stimulus. Analysts believe that BOC Governor Poloz may finally hint about easing today when he gives a speech in Toronto.
Meanwhile, the pound has been on a roll as the possibility of a no-deal Brexit becomes more unlikely. In GBP/CAD’s case, this translated to an uptrend since the start of the month.
Will the bulls maintain their momentum? Word around is that Labour leader Jeremy Corbyn is set to unveil his party’s election manifesto, which could shake the pound up some.
If GBP/CAD dips down to the 1.7150 zone, then we could see a good opportunity to buy into the uptrend as the area lines up with a 50% Fib retracement, rising trend line support, and a previous area of interest.
If GBP/CAD fails to dip back before making new monthly highs, however, then you can also buy at current levels, place your stops just below the trend line, and aim for 1.7450 or even 1.7800 that marks areas of interest on the higher time frames.