This pair might be in for a big breakdown now that the UK printed a bunch of reports in the red!
Here are the levels I’m watching.
Before moving on, ICYMI, I’ve listed the potential economic catalysts that you need to watch out for this week. Check them out before you place your first trades today!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
New Zealand visitor arrivals up by 89.7% m/m in May
Japanese BSI manufacturing index down from -7.9 to -9.9
UK industrial production sank by 0.6% in May, manufacturing production down 1.0%
UK economy contracted by 0.3% in May vs. projected 0.2% growth
UK goods trade deficit narrowed from 23.9B GBP to 20.9B GBP
Asian shares slump ahead of FOMC week, China’s COVID-19 restrictions
Beijing undergoing “explosive” COVID-19 outbreak
FOMC member Brainard’s speech at 6:00 pm GMT
New Zealand food price index at 10:45 pm GMT
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️
What to Watch: GBP/CAD
With the latest round of UK reports fueling recession fears, I wouldn’t be surprised if GBP/CAD breaks down from this range soon!
The pair is currently testing support, and a move below the 1.5720 level might be enough to spur a selloff that’s the same height as the chart pattern.
The 100 SMA is below the 200 SMA, after all, hinting that there’s still some bearish pressure in play. Just be careful since the gap between the indicators has narrowed enough to hint at a possible bullish crossover.
Also, Stochastic is on the move up after climbing out of the oversold region recently, signaling that buyers are in control.
Then again, it’s hard to dismiss how the UK economy posted back-to-back monthly contractions and revealed a sharp drop in industrial production for May.
There are no major reports lined up from Canada, so the commodity currency might take cues from crude oil or overall market sentiment. Be careful out there!