GBP/CAD has been sliding since mid-July, but it’s now bouncing back toward a packed area of interest near 1.8850 — where major resistance lines all converge.
Will sellers defend this zone, or will the bulls use this week’s event risk to push through?
Here’s what we’re seeing on the 4-hour time frame:
GBP/CAD: 4-hour
GBP/CAD 4-hour Forex Chart Faster with TradingView
The Bank of England is widely expected to keep policy unchanged on Thursday. But services inflation is back up to 3.7%, and two MPC members voted for a hike last time around. If BOE Governor Bailey sounds worried about inflation, Sterling could catch a bid.
Over in Canada, the Loonie is still taking its cues from oil prices. The Strait of Hormuz remains closed, Houthi drones hit Saudi export facilities over the weekend, and although U.S. and Iranian airstrikes have paused, there’s still no deal to get ships moving again.
So which way will these catalysts push GBP/CAD this week?
GBP/CAD broke below a rising trend line support in late July and has been drifting lower ever since. The pair is now trying to bounce from the 1.8750 area, and is trading just under the Pivot Point (1.8810) line.Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your homework on the British pound and the Canadian dollar, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
Keep your eye on the 1.8850 zone. As you can see, the area lines up with the 38.2% Fib retracement, the 200 SMA, the broken trend line, and the top of a descending channel, giving sellers plenty to work with.
If the 1.8850 area holds as resistance, GBP/CAD could turn lower toward S1 at 1.8690. A deeper pullback could then bring S2 at 1.8617 into play.
But if buyers can push cleanly above 1.8850, possibly on a hawkish BOE or weaker crude oil prices, the pair could make a run at R1 at 1.88826 before targeting R2 near 1.90031.
Whichever bias you end up trading, don’t forget to practice proper risk management and stay aware of top-tier catalysts that could influence overall market sentiment!
This GBP/CAD setup is organized around a zone where four separate technical signals all converge at the same price, and if you’re new to that concept, Premium members can read our lesson:
📖 Confluence: Stacking the Odds in Your Favor
Reading this helps you understand how to score a setup before you take it, why levels with multiple confirming factors carry more weight than isolated signals, and how to identify when a zone like 1.8850 deserves more attention than any single indicator would suggest.
And if you’re not a Premium subscriber yet, now’s a good time to sign up.
With Babypips Premium, you get full access to School of Pipsology lessons that help you understand not just where key levels sit on a chart, but why zones where multiple signals line up carry far more weight than any single indicator on its own.
