GBP/CAD just bounced from a trend line support ahead of the BOC decision!
Will the pair stay inside its triangle consolidation? Or will today’s events force a technical breakout for the pair?
Before moving on, ICYMI, yesterday’s watchlist checked out EUR/USD’s short-term downtrend ahead of jobs reports from the U.S. and after the Euro Area PMI releases. Be sure to check out if it’s still a good play!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
ISM Services PMI for November: 52.7 (51.5 forecast; 51.8 previous); Prices Index: 58 vs. 58.6 previous; Employment Index: 50.7 vs. 50.2 previous
JOLTs Job Openings for October: 8.73M (9.4M forecast; 9.35M previous)
Australia’s quarterly GDP for Q3: 0.2% q/q (0.5% q/q forecast, 0.4% q/q previous)
Crude oil prices extended their losses on Chinese demand concerns and skepticism about OPEC+ cuts
In a speech, BOJ Deputy Governor Ryozo Himino talked about a “sufficient possibility of achieving a positive outcome” from an exit from negative interest rates
Germany’s factory orders for October: -3.7% m/m (0.2% m/m forecast, 0.7% m/m previous)
UK’s construction PMI for November: 45.5 (46.7 forecast, 45.6 previous); “Elevated borrowing costs and subdued demand for new housing projects were widely cited as factors holding back construction activity.”
Price Action News
Overlay of NZD vs. Major Currencies Chart by TradingView
Risk-taking was the name of the game during the Asian session as traders took the worse-than-expected U.S. jobs data as another sign that the Fed would sooner cut its interest rates than raise them.
Both AUD and NZD popped up across the board but the New Zealand dollar just edged AUD a tiny bit higher today.
The comdolls gave up some of their gains at the start of European session trading, though, likely over some profit-taking and cautiousness ahead of this week’s U.S. NFP reports.
NZD just crossed to the red against AUD and is registering the most gains against safe havens like JPY, CHF, and EUR.
Upcoming Potential Catalysts on the Economic Calendar:
Eurozone’s retail sales at 10:00 am GMTBOE’s Financial Stability Report at 10:30 am GMTBOE’s FPC quarterly statement and meeting minutes at 10:30 am GMTBOE Gov. Bailey to give a speech at 11:00 am GMTU.S. ADP report at 1:15 pm GMTBOC’s policy decision at 3:00 pm GMTCanada’s IVEY PMI at 3:00 pm GMT
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️
GBP/CAD 15-min Forex Chart by TradingView
Earlier today, a surge of comdoll weakness and a bit of risk-taking in the early London session trading helped bump GBP/CAD from a trend line support.
The pair is now trading closer to the 1.7120 Pivot Point line in the 15-minute time frame. Coincidentally, the Pivot Point resistance is also near the 100 and 200 SMA in the charts.
Can GBP/CAD sustain its upswing? Or will we see another trend line retest in the next few hours?
The Bank of Canada (BOC) is expected to keep its interest rates at 5.00% later today. More importantly, we’ll probably see lower growth and inflation projections from Governor Macklem and his team.
A dovish pause, combined with crude oil prices being limited by Chinese growth concerns, could drag CAD lower against counterparts like GBP.
We still have a couple more candlesticks left before the actual BOC decision though. This means that a retest of the trend line support is still in the cards especially if traders take intraday profits ahead of the central bank event.
Look out for a clear break above the Pivot Point resistance, which opens the pair to a retest of the 1.7150 psychological handle or the R1 (1.7170) Pivot Point resistance.
