Canadian Dollar a Sell Against Pound Sterling say Scotiabank Techs

The British Pound is predicted to extend recent strength against the Canadian Dollar by a leading foreign exchange technical analyst.

Shaun Osborne, a technical strategist with Scotiabank, says any weakness in Sterling against the Canadian currency could be considered an opportunistic entry point to traders looking to profit on further advances.

The call comes as the GBP/CAD exchange rate is seen trading sideways as a period of consolidation sets in after the pair failed to break above the 1.66 area.

At the time of writing the exchange rate is quoted at 1.6455.

“The strong rally in the cross from last week’s low is consolidating and, we think, remains prone to short-term corrective weakness,” says Osborne.

But Osborne notes that the strongly bullish (outside week reversal) price action from last week overall suggests to him that downside risks are limited—to the 1.62/1.63 range perhaps—and that there might not be much of a dip at all.

“We think minor dips remain a buy,” says Osborne.

Elsewhere, the Canadian Dollar came off a one-week best agaisnt the US Dollar having succumbed to a broad rebound in the US Dollar rebound.

Downward pressure on Canada's currency has abated after US President Trump president took executive action this week to jumpstart pipeline projects that could lead to increased U.S. demand for Canadian oil.

"Still, headwinds lurk for the loonie particularly once the market sets its sights more on central bank policy divergence with U.S. interest rates seen headed higher which contrasts the rate cut the Bank of Canada has on the table," says analyst Joe Manimbo at Western Union.