Pound-to-Canadian Dollar Week Ahead Forecast: Staying Constructive

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The Pound's rally against the Canadian Dollar is due a temporary pause, but our Week Ahead Forecast model stays constructive.

The Pound-to-Canadian Dollar exchange rate rallied to its highest level since the Brexit vote last week at 1.8779, in accordance with the multi-year uptrend that we are witnessing.

Big picture, that uptrend is intact, and we look for new fresh highs in the coming months, but in the coming days, a pullback is possible.

Last week's GBP/CAD peak came with some obvious warnings of overbought conditions building in the exchange rate as the Relative Strength Index peaked above 80.

Above: GBPCAD daily chart.

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This is a rare development as the RSI rarely manages to go above 70. The signal, therefore, was that a pullback and consolidation were required.

This is playing out and we think the setup for coming days allows for more softness.

For now, weakness will be shallow, and support at the nine-day exponential moving average (EMA) at 1.8556 must be cracked for a deepening of losses.

If it is not, then we could be looking at a retest of last week's high at 1.8779 before long.

We are anticipating a soft phase in a number of GBP exchange rates this week, but GBP/CAD looks less prone to weakness owing to Canada's unique exposure to U.S. tariffs.

That tariff story is, of course, the main driver of the CAD weakness we have witnessed in 2025, and with an April 02 tariff deadline approaching, it's hard to back a major recovery in the North American currency.

That being said, a lot of bad news is in the price of CAD, and when Trump shows contentment with his actions the scope for a strong rebound will build.

For now, however, the U.S. President is happy to pursue a 'hawkish' stance on tariffs, which leaves CAD vulnerable. So while the day for a big CAD snapback is coming, we might have to wait until after the April 02 tariff blitz.