Fears of a hard Brexit just won’t let up, and the upcoming inflation reports from the U.K. could bring another set of losses for this sterling pair.
Fresh Market Headlines & Economic Data:
- Australia’s CB leading index up another 0.2% in Oct
- New Zealand current account deficit widened from 1.04B to 6.35B NZD
- Australia’s MI leading index slipped by 0.1% after earlier 0.2% drop
- Japanese trade deficit widened from 0.05T to 0.06T JPY as expected
- Asian markets take a breather but risk aversion looms on Brexit risks
- API: Crude oil inventories up by 4.7 million barrels
- Chinese foreign ministry: No new info on trade deal but hoping for mutual cooperation
- Russian authorities seized five Japanese fishing vessels
PBOC has lowered the interest rate on 14-day reverse repos from 2.70% to 2.65%
Upcoming Potential Catalysts on the Forex Calendar:
- German producer price index at 8:00 am GMT
- ECB head Lagarde’s speech at 9:30 am GMT
- German Ifo business climate index at 10:00 am GMT
- U.K. headline and core CPI at 10:30 am GMT
- Euro zone final CPI readings at 11:00 am GMT
What to Watch: GBP/CAD
This pair has been trending higher for quite some time, but it looks like a break below its rising trend line on the 4-hour chart is due. If so, a reversal from the uptrend might be in the works.
Sterling remains under pressure as PM Johnson hinted at pushing the Brexit deadline further, which could run up the risk of a hard exit once more.
It also helps that the trend is still overwhelmingly “bearish” across MarketMilk’s moving averages:
Meanwhile, the Loonie has been enjoying a bit of support thanks to crude oil rallies on the heels of a delay in the next batch of tariffs from Uncle Sam.
A short play below the 1.7250 minor psychological mark and a target that’s roughly the size of the pair’s average volatility could be enough to catch any downside momentum.
Here’s GBP/CAD’s average volatility per day if you need help placing your exits: