Pound Living on ‘Borrowed Time’ Against Canadian Dollar
The Pound to Canadian Dollar exchange rate (GBP/CAD) trades near fresh 8-month highs having touched 1.7450 this week.
The period of appreciation for Sterling started back in mid-January 2017 and the currency hasn’t looked back since.
Indeed, the Pound has risen 5.42% against the Canadian Dollar in 2017 - the UK currency’s best performance against any of its G10 rivals.
But, the rally is forecast to fade by one of Canada’s leading foreign exchange technical analysts.
“GBPCAD strength still looks to be living on borrowed time. The GBP remains well-supported and late gains yesterday took the cross close to noted resistance at 1.7521, 50% retracement of the 1.93/1.57 drop,” says analyst Shaun Osborne at Scotiabank.
Persistent GBP gains despite negative developments on the daily Bollinger study (consecutive daily closes above the upper band), suggested to Osborne that the cross may need to test the 1.75 area before considering a correction.
“Short-term price action looks a little toppish and the daily slow stochastic oscillator supports the idea of limited GBP gains from here,” says Osborne.
Scotiabank favour fading GBP gains near-term.
