The Great British Pound/Canadian Dollar currency pair (also referred to as GBPCAD and GBP/CAD) is one of the most actively traded in the world. In this article we will examine how GBPCAD is performing.
GBP/CAD Key Stats
- 2021 high: 1.7886
- 2021 low: 1.6638
- YTD high: 1.7377
- YTD low: 1.5681
- YTD % change: -7.9%
GBPCAD Forecast
There’s only one direction for the GBP/CAD at the moment, and that is down. The pair, after ranging for much of 2020 and 2021, finally broke lower in March, and since then it has continued on its downward trajectory. In the near term, we expect a pullback, targeting the 1.5961 level, before price then continues on its current path. Key areas we are targeting to the downside include 1.5621 and 1.5500.
The recent vulnerability in the pair has seen it fall to lows seen not long after the Brexit vote. It has been fuelled by the rise in oil prices and more recently, a more hawkish stance by the Bank of Canada (BoC).
GBPCAD Fundamental Analysis
The majority, if not all major currencies are impacted by the general state of the economy and economic characteristics such as employment, GDP, monetary policy, and inflation. These factors can cause major swings in prices.
The GBP has confronted several challenges over the last few years and Brexit caused a significant decline in the pound. Despite a deal between the UK and the European Union, disputes have emerged over the trade agreement and border controls. Furthermore, GBP investors are yet to be convinced of the success of leaving the European Union and issues remain in the long term.
The CAD can often be correlated to the price of oil as Canada earns the majority of its earnings from the sale of crude oil. It is the fifth-largest producer and exporter. Crude oil has made significant gains this year due to increases in economic activity and the Ukraine-Russia war, causing a higher demand for oil and resulting in a stronger Canadian dollar. A recent hawkish turn by the Bank of Canada has also boosted the currency.
GBPCAD Technical Analysis
Support Levels
- 1.5575
- 1.5306
- 1.4833
Resistance Levels
- 7786
- 6765
- 6190
Focusing on support levels, or in a bearish investor’s case, potential targets are essential at current levels with the pair trading at its lowest levels since 2013. Level 1.5575 has acted as a strong support level over the years. Meanwhile, 1.5306 will be one to watch as the CAD continues its bullish run. If the GBPCAD reaches 1.4833, it will be at its lowest level in two decades.
The GBP/CAD fluctuated significantly between late 2019 and early 2022, with no clear direction. Looking over the long-term, we can see a key resistance level at 1.7786 which was only broken once since 2016 despite being tested multiple times, although, we are far from another potential test at the moment. Level 1.6765 has provided support for the pair since 2020. However, strength in the CAD in 2022 caused a break and has since become a potentially strong resistance level. In addition, 1.6190 has recently shown itself to be a strong resistance level, and a potential move and close above will almost certainly offer signal a bullish move.
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