Sterling is a major focus this week with a batch of economic data featured, starting from jobs today, to inflation and retail sales. Risks to the inflation outlook are on both sides as BoE Governor Andrew Bailey explained. Thus, the path of monetary policy, as well as the Pound’s movements, are also highly uncertain.
GBP/CAD’s decline slowed after falling to 1.5774 earlier in the month, hitting 161.8% projection of 1.7623 to 1.6636 from 1.7375 at 1.5778. More importantly, it’s now close to long term support at 1.5746 (2016 low). Further decline will remain in favor as long as 1.6197 resistance holds. Break of 1.5774 could easily push GBP/CAD through 1.5746 to resume the down trend from 2.0971 (2015 high). Such development will also raise the chance of resuming larger down trend from 2.5471 (2002 high) through 1.4831 (2010 low) in the medium term. It could be rather significant.
