FXStreet (Córdoba) – Wild swings in oil prices and the BoC decision to stay on hold led the way for the GBP/CAD cross on Wednesday.
GBP/CAD surged to 2.0794 as the commodity fell to fresh multi-year lows, but then plummeted to fresh daily lows of 2.0550 as the loonie benefited from a less dovish than expected BoC statement and a slight recovery in crude by the end of the session.
Crude remained in the eye of the storm, as West Texas Intermediate crude lost more than 6% $26.20 a barrel ahead of the release of the US API stockpiles report, expected to reflect an increase in inventories of 2.75 million barrels.
GBP/CAD technical view
“GBP/CAD is about to close down for a third day in-a-row, and below its daily 20 SMA for the first time in almost two weeks. Short term, the technical picture is now favoring additional declines, with the price nearing 2.0560, a Fibonacci support, and the technical indicators heading south near oversold territory”, said Valeria Bednarik, chief analyst at FXStreet. “In the 4 hours chart, the technical indicators head sharply lower after faltering around their mid-lines, while the price is far below its 20 SMA. Nevertheless, the upcoming direction will depend solely on oil, as if the commodity falls again, the pair will likely surge.”
Support levels: 20550 2.0510 2.0470. Resistance levels: 2.0640 2.0690 2.0750.
(Market News Provided by FXstreet)