This pair is still stuck in consolidation, but the upbeat U.K. CPI and the upcoming Canadian inflation data might spur a breakout.
Which way do you think GBP/CAD will go?
Before moving on, ICYMI, today’s Asia-London session watchlist looked at GBP/JPY for a range support test ahead of the U.K. CPI release. Be sure to check out if it’s still a valid play!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
Australia’s Westpac consumer sentiment rebounded 2.0% in Sept
Chinese retail sales slumped from 8.5% to 2.5% y/y vs. 6.9% forecast
Chinese fixed asset investment down from 10.3% to 8.9% y/y
Chinese industrial production down from 6.4% to 5.3% y/y
Asian shares stumble on downbeat Chinese data dump
U.K. headline CPI jumped from 2.0% to 3.0 vs. 2.9% forecast
U.K. core CPI up from 1.8% to 3.1% vs. 2.9% forecast
European markets under pressure as China’s data sparks growth concerns
Upcoming Potential Catalysts on the Economic Calendar:
Canadian inflation reports at 12:30 pm GMT
Empire State manufacturing index at 12:30 pm GMT
U.S. industrial production at 1:15 pm GMT
U.S. crude oil inventories at 2:30 pm GMT
New Zealand quarterly GDP at 10:45 pm GMT
If you’re not familiar with the forex market’s main trading sessions, check out our Forex Market Hours tool.
What to Watch: GBP/CAD
Earlier today the U.K. printed hella impressive CPI readings, boosting hopes that the BOE could tighten monetary policy pretty soon.
Could this mean that a bullish triangle break for GBP/CAD is due?
This could all depend on Canada’s own inflation reports, which might show weaker price pressures for the previous month.
Headline CPI is slated to slide from 0.6% to 0.1%, possibly dragging the Loonie lower.
Just be careful since the oil-related Canadian dollar might also take cues from the EIA report, which might reveal a huge reduction in crude oil stockpiles. After all, the latest weather disturbances left majority of production offline in the past weeks.
An even larger drop in crude oil inventory, combined with stronger than expected Canadian CPI, might be enough to spur a bearish triangle break for GBP/CAD.
Either way, the pair could be in for a move that’s at least the same height as the triangle if a breakout happens.
Technical indicators are leaning towards a bullish break since the 100 SMA is above the 200 SMA while Stochastic has plenty of room to climb.
Also, note that risk-off vibes are being felt across the markets after China printed downbeat data earlier on.
