I’ve got my eyes on a simple break-and-retest setup for this pair.
Can the upcoming catalysts trigger a bounce?
Before moving on, ICYMI, today’s Daily Asia-London Session Watchlist looked at GBP/JPY breaking above its short-term range ahead of the U.K. jobs release. Be sure to check that out to see if there is still a potential play!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
- Chinese central bank kept key benchmark rate on hold
- Japanese gov’t to reintroduce lockdown measures on new surge in cases?
- RBA meeting minutes revealed policymakers worried about high joblessness
- U.S.-Russia tensions rise on sanctions and Black Sea blockage
Upcoming Potential Catalysts on the Economic Calendar:
- Australia’s CB leading index at 3:30 pm GMT
- New Zealand quarterly CPI at 11:45 pm GMT
What to Watch: GBP/CAD
GBP/CAD recently busted through the resistance around the 1.7400 major psychological mark in a strong rally.The pair might still retreat from this climb as buyers book quick profits, possibly leading to a correction to nearby Fib levels. After all, Stochastic is starting to turn lower to suggest a pickup in selling pressure.
Where might pound bulls return?
The 38.2% retracement lines up with the broken resistance, which might now hold as a floor. A larger pullback could last until the 61.8% Fib that lines up with the dynamic support at the moving averages.
The 100 SMA just crossed above the 200 SMA to signal that support levels are more likely to hold than to break.
Of course this might hinge on the U.K. jobs report, which is slated to show a smaller increase in joblessness for March. A stronger than expected result could spur a shallow pullback while a larger increase in unemployment could pave the way for a bigger correction.
There are no major reports due from the Canadian economy for today, but be mindful of traders pricing in expectations ahead of the BOC monetary policy decision later on.