FxWirePro: GBP/CAD pauses 4-day downside, hawkish BoE boosts pound

GBP/CAD chart - Trading View 

Spot Analysis:

GBP/CAD was trading 0.15% higher on the day at 1.7382 at around 10:00 GMT

Previous Week's High/ Low: 1.7570/ 1.7432

Previous Session's High/ Low: 1.7424/ 1.7285

Fundamental Overview:

The British pound boosted following a surprise hawkish tone from the Bank of England (BOE) on Thursday. 

The BOE in its September policy meeting remained committed to maintaining interest rates and quantitative easing levels (QE) at existing settings.

The Bank’s Monetary Policy Committee (MPC) maintained its status-quo and kept the interest rate at 0.1%. 

Two MPC members Dave Ramsden and Michael Saunders voted for an early end to government bond purchases.  

Bank of England appeared to have brought forward their expectations for an interest rate rise to March, opening the door to an interest rate hike before the end of the year.

Technical Analysis:

- GBP/CAD has paused a 4-day bearish streak

- The pair finds strong support at 200-DMA and cloud base

- Momentum is bearish. Stochs are biased lower and RSI is below 50

- GMMA indicator shows minor trend has turned bearish, while major trend is neutral

- Price has bounced off 200-DMA support with Spinning Top formation 

- Bearish 5-DMA crossover on 20-DMA will keeps gains limited

Major Support and Resistance Levels:

Support - 1.7321 (200-DMA), Resistance - 1.7426 (21-EMA)

Summary: GBP/CAD bounce off cloud and 200-DMA support is likely to be limited. Technicals point to more weakness in the pair. Scope for test of trendline support at 1.7250. Bearish invalidation only above 21-EMA.