GBP/USD, EUR/GBP, USD/CAD – North American Session Daily ForecastThe Canadian dollar is sharply lower on Wednesday, after a dovish appraisal of the economy from the Bank of Canada. The U.K. will go to the polls on December 12, but GBP/USD and EUR/GBP are showing little movement.
GBP/USD is trading sideways on Wednesday. In the North American session, the pair is trading at 1.2874, up 0.07% on the day.
Johnson Calls Snap Election
Prime Minister Johnson has called a snap election for December 12. This development comes after a prolonged deadlock over Brexit, which has been stuck in the British parliament for months. In the words of Johnson, the British public will be “given a choice” over Brexit in the December vote.
GBP/USD continues to trade close to the 1.2870 line. The pair has been unable to consolidate above this line. On the upside, there is resistance at 1.2940. On the downside, there is support at 1.2810. This line was tested last week.
USD/CAD is posted sharp gains in the North American session. Currently, the pair is trading at 1.3180, up 0.69% on the day. The pair is currently at its highest level since October 17.
Lonnie Slips on Dovish Bank of Canada
As expected, the Bank of Canada maintained the benchmark rate at 1.75%, where they have been pegged for nine straight months. BoC Governor Stephen Poloz had a dovish message for the markets, and the Canadian dollar responded with considerable losses. Poloz stated that “the resilience of Canada’s economy will be increasingly tested as trade conflicts and uncertainty persist”. Poloz could be readying the markets for another rate cut before the end of the year.
USD/CAD is showing a stark trend reversal and has posted strong gains on Wednesday. The pair punched above resistance at 1.3120 earlier in the day and is currently putting pressure on resistance at the round number of 1.3200. This line was last tested in mid-October. I am keeping an eye on the 50-EMA line, which is at 1.3193. If the pair breaks above this line, it would be a bullish signal for the pair.
EUR/GBP is flat in Wednesday trade. In the North American session, the pair is trading at 0.8638, down 0.01% on the day.
EUR/GBP continues to hover around the line 0.8647, which is currently an immediate resistance line. The pair has been trading sideways since late last week. and the lack of a trend could continue for the rest of the week. Above, we find resistance at the round number of 0.8700. On the downside, there is support at 0.8580, which was tested last week.