At the time of writing, GBP/CAD is the top mover for today. But it’s very tight. Sterling is strongest for sure as boosted by Brexit optimism. The headlines flying around suggest that both UK and EU are working intensely to complete the withdrawal agreement, including the stick Irish backstop, within a day or two. That would give a green-light to hold an unscheduled EU summit to approve the deal later in November.
While there is no confirmation of any sort for the moment, at least, traders are betting on a positive outcome.
On the other hand, Canadian Dollar suffers renewed selling as oil price decline accelerates. WTI crude oil has now breached 57. The news of Saudi Arabia’s export cut earlier this week just gave oil price a temporary lift.
Take a look at GBP/CAD, the cross had two attempt to break through 1.6594 support in October but failed. This week’s rebound off 55 day EMA is a bullish development. But for now, it’s still holding in range of 1.6594/7285. So, we’d treat the current rebound as part of the consolidation pattern from 1.6594. That is, upside attempt would be limited by 38.2% retracement of 1.8415 to 1.6594 at 1.7290. Fall from 1.8415 is still expected to resume through 1.6594 low at a later stage. However, firm break of 1.7290 will invalidate out view and would at least bring further rise rise back to 61.8% retracement at 1.7719.
