- The British pound has pulled back just a bit against the Canadian dollar during the trading session on Wednesday, but it looks like we have plenty of support and it almost looks like we are trying to form some type of bullish flag.
- If we can break out to the upside and clear to a fresh new high, then it’s likely that this pair truly takes off to the upside.
The Potential Target Above
All things being equal, the 1.80 level is a target on that breakout to the upside and perhaps even further. Keep in mind that the Canadian dollar has a little bit of a drag to it due to the fact that the Bank of Canada has cut a couple of times already. In general, this is a market that continues to see a lot of buy on the dip behavior and I think that continues to be the case due to the interest rate differential and the fact that the Bank of England really hasn’t suggested they are going to start cutting quite yet.
So, the interest rate differential certainly favors holding on to this pair. Furthermore, crude oil has been a bit of a mess and as long as that’s going to be the case that weighs upon the Canadian dollar as well.Therefore, I think you continue to look at this through the prism of positivity, but I will say that the 1.7850 level is a major level going back multiple years. So, pulling back and then taking off to the upside certainly makes a significant amount of sense. And then eventually we could go much higher once we break through that significant barrier. As far as selling is concerned, I don’t really have any interest at the moment. And wouldn’t really think about it until we were well below the 50 day EMA.
Ready to trade our daily Forex forecast? Here’s some of the best regulated forex brokers in Canada to check out.
