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This pound pair is deciding whether to make a bounce or a break from support, and the upcoming U.K. CPI release could determine where it goes!

Is it in for another move back to the resistance? Or will a reversal from the uptrend take place?

Before we discuss today’s setup, check out the headlines that moved the major currencies today:

Currency Snapshot

Major Forex Pairs Price Performance from MarketMilk
Major Forex Pairs Price Performance from MarketMilk

Fresh Market Headlines & Economic Data:

Upcoming Potential Catalysts on the Economic Calendar:

  • U.K. inflation reports at 7:00 am GMT
  • Eurozone final CPI readings at 10:00 am GMT

What to Watch: GBP/CAD

GBP/CAD 1-hour Forex Chart
GBP/CAD 1-hour Forex Chart

GBP/CAD has been trending higher on its short-term chart and is currently sitting pretty at the ascending channel support.

Inflation figures from the U.K. could determine if a bounce or break would follow, as stronger than expected figures could allow the uptrend to stay intact.

If so, a move back to the channel top at 1.7250 or at least until the mid-channel area of interest at 1.7150 could happen. The 100 SMA is above the 200 SMA to suggest that the rally could carry on while Stochastic is indicating a potential takeover by pound bulls.

Weak results, on the other hand, could stoke BOE easing expectations and spur a reversal from the climb.

Keep in mind that the central bank is already widely expected to increase its asset purchase program, and weak inflation data could convince market watchers that a bigger boost in stimulus is likely.

Not too sure of your entry and stop placements? You can review the average GBP/CAD volatility for clues on how far the pair can move today.