British Pound Technical Analysis: GBP/CAD, GBP/CHF, GBP/NZD
British Pound Technical Analysis, GBP/CAD, GBP/CHF, GBP/NZD, BOC – TALKING POINTS
- GBP/CAD September uptrend was invalidated as the December downtrend pressures the pair
- GBP/CHF compression zone catalyzed downside breakout and pushed pair to October lows
- GBP/NZD uptrend may not hold as technical cues signal a bearish correction could be ahead
BRITISH POUND ANALYSIS VS CANADIAN DOLLAR
The outlook for GBP/CAD is looking increasingly bearish after the pair failed to remount the September uptrend (gold channel) after breaking below it last month. This is compounded by GBP/CAD’s inability to clear the December downtrend, further strengthening the bearish overhang. Looking ahead, the pair may seek to retest November support at 1.6877, which, if cleared opens the door to the October swing-low at 1.6730.
GBP/CAD – Daily Chart
GBP/CAD chart created using TradingView
BANK OF CANADA RATE DECISION
The Bank of Canada (BOC) will be announcing its rate decision with expectations that officials will vote to slash interest rates by 25 basis points from 1.75 to 1.50 percent. While this may initially weigh on the Canadian Dollar, if central bank officials give an unexpectedly less-dovish outlook than what markets had priced in, GBP/CAD’s gains may be capped.
On the other hand, if the central bank catches markets off-guard and radiates dovish overtones, it could amplify GBP/CAD’s gains and steer it away from support at 1.6957. The fundamental catalyst may also reveal more about the durability of descending resistance and its ability to continue guiding GBP/CAD lower. To get more updates on the pair, be sure to follow me on Twitter @ZabelinDimitri.
BRITISH POUND FORECAST VS SWISS FRANC
As forecasted in my prior GBP/CHF outlook, the compression zone between descending resistance and support at 1.2540 catalyzed a downside breakout and sent the pair crashing through several price floors. GBP/CHF is now less than one percent away from testing the October swing-low at 1.2126 where selling pressure may either abate and precede a bounce back or amplify the pair’s descent if it invalidates the floor.
GBP/CHF – Daily Chart
GBP/CHF chart created using TradingView
BRITISH POUND OUTLOOK VS NEW ZEALAND DOLLAR
Since mid-January, GBP/NZD has been climbing along an uptrend, but negative RSI divergence signals upside momentum is fading as the pair retest the fortitude of the slope of appreciation. If the pair clears the uptrend with follow-through, an aggressive selling bout may ensue and push the GBP/NZD lower. However, downside momentum may begin to ease at the 2.0001 floor.
GBP/NZD – Daily Chart
GBP/NZD chart created using TradingView
BRITISH POUND TRADING RESOURCES
- Tune into Dimitri Zabelin’s webinar outlining geopolitical risks affecting markets in the week ahead!
- New to trading? See our free trading guides here!
- Get more trading resources by DailyFX!
--- Written by Dimitri Zabelin, Jr Currency Analyst for DailyFX.com
To contact Dimitri, use the comments section below or @ZabelinDimitrion Twitter
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.