GBP/CAD hovers near 7-month low

The GBP/CAD cross plummeted to its lowest level since July 2015, setting a daily low of 1.9548 in the American session, and holding nearby at the end of the day where it records a 1.2% loss.

A combination of a weaker pound and a stronger CAD, due to a sharp recovery in oil prices, was behind the 300 pips decline. The black gold rallied as Iran cheered the agreement between oil producers to freeze output, although the country did not commit to actually maintain production levels unchanged.

GBP/CAD technical view

“The short term technical picture suggests the pair may continue falling as in the 1 hour chart, the technical indicators are resuming their declines, despite being in extreme oversold territory, whilst the 20 SMA turned sharply lower far above the current level”, said Valeria Bednarik, chief analyst at FXStreet. “In the 4 hours chart, the technical indicators are giving some signs of downward exhaustion in extreme oversold territory, still far from suggesting an upward movement, even if corrective”.

Support levels: 1.9545 1.9500 1.9460. Resistance levels: 1.9640 1.9690 1.9735.