GBP/USD, EUR/GBP, USD/CAD – Calm Waters on Wednesday
GBP/USD continues to range-trade. In Wednesday’s North American session, the pair is trading at 1.2867, down 0.10% on the day. There are no major events out of the U.S. or the U.K. on Wednesday, so I expect a calm North American session for the pair.
Ahead – Bank of England Rate Decision
The BoE is expected to maintain the benchmark rate at 0.75% and the QE program at 435 billion pounds. The Monetary Policy Committee (MPC) voted unanimously to maintain this policy in the previous meeting and no change is expected at this week’s meeting. Investors will also be interested in the BoE’s quarterly inflation report, which will provide inflation and growth forecasts.
GBP/USD continues to test support at 1.2870, but has not been able to break out so far this week. This line remains vulnerable, and I would be surprised to see the pair push below this line before the end of the week. On the upside, we find resistance at 1.2940, which was tested last week.
USD/CAD has recorded slight gains on Wednesday. In the North American session, the pair is trading at 1.3182, up 0.21%.
Canadian Ivey PMI Loses Ground
Canada’s Ivey PMI remained in contraction territory for a second straight month, with a weak reading of 48.2 in October. This was lower than the September reading of 48.7 and missed the forecast of 49.3 points. These readings are worrisome – prior to the September release, the PMI had been pointing to expansion since December 2015.
USD/CAD has been range-bound in November, as the pair remains lackluster. I am keeping an eye on the 50-EMA. The pair broke below this line in the European session but has retreated, as the 50-EMA is providing support at 1.3140. Below, there is support at 1.3120.
EUR/GBP is trading sideways on Wednesday. In the North American session, the pair is trading at 0.8603, up 0.08% on the day.
EUR/GBP has been range-bound since mid-October, so the pair is due for a breakout. Still, traders will have to show some patience while the pair trades sideways. EUR/GBP has been unable to breach resistance at 0.8647, which has proven to be resilient. On the downside, the support level of 0.8580 remains vulnerable.