A1 Trading Company

Ticker tape by TradingView

February 21, 2022

Is GBP/CAD About To Surge Again?

Frank Cabibi

Since the beginning of this month, pound-loonie has climbed over 1.4% on growing bullish sentiment surrounding the British economy and monetary policy. Here are some reasons why GBP/CAD is about to surge again.

Some Diplomacy In The East

It appears that Putin is agreeing to talk things over with French president Macron in a potential summit that will be discussed this Friday. In the event of diplomacy, this may bring ease to the tensions and the rising oil prices which have been good for the Canadian economy. In order for this summit to take place, Russia cannot invade Ukraine. So, this should deescalate the conflict for a little while at least, and this could also cause oil prices/CAD to come down a bit.

Institutional Activity

COT data last Friday showed us that institutions were selling out of CAD and buying GBP futures contracts. The data included an increase in short positions as well as a decrease in long positions on the loone. At the same time, long contracts saw a considerable rise for GBP as the shorts decreased. If this behavior continues into the next week, we could likely see a more expensive pound overall.

Big Technical Break

GBP/CAD about to surge

The pair broke out of a tiple top on the 1D timeframe after cleanly bouncing off its 200 DMA several sessions ago. The next clear level of resistance is another 1.2% higher in the 1.75000s. Another big technical setup is the potential golden cross forming between the 50 and 200 day moving averages.

Overall, it would likely need an easing of conflict, continued support from big money, and a close above this key resistance level for the pair to break into another spike to the upside.

A1 Edgefinder

#1 Market Scanner Tool
Take 10% off using code "READER"
GET ACCESS NOW
Want to See Our Trades?

Join The VIP Community!

Our entries, exits & analysis
Live Webinar Coaching
Trading Chatrooms
Strategy Library 
Exclusive Trading Guides
Use Code "READER" for 10% OFF!
JOIN NOWJoin FREE Discord
Listen to More Episodes
Why the New FOMC Decision Matters

Yesterday, the Federal Open Market Committee (FOMC), the Federal Reserve’s policy-making body, implemented yet another 75 basis point interest rate hike. While this move was perfectly in line with market forecasts, Chair Powell’s comments following the subsequent press conference, in which he discussed the FOMC’s new set of economic projections, were significant. He continued to […]

Read More
Shocking CAD Inflation News

Statistics Canada released a surprising new batch of inflation data this morning: month-over-month CPI failed to meet market forecasts, declining by 0.3% instead of the anticipated 0.1%. Rather than being an outlier, the other measurements of CPI mostly followed suit, as both year-over-year Trimmed CPI and Median CPI likewise failed to meet expectations. Trimmed CPI’s […]

Read More
2 Paths for Aussie Bears

At 9:30 pm Eastern Time tonight, the Reserve Bank of Australia (RBA) will be publishing their latest round of monetary policy meeting minutes. While there is a chance that their intentions could come across as more hawkish than expected, they currently have little reason to be. Despite relatively low unemployment at 3.5%, steady GDP growth, […]

Read More
DISCLAIMER: All comments made by TraderNick’s Forex Group, LLC are for educational and informational purposes only. All comments should not be construed as investment advice regarding the purchase or sale of any securities or financial instrument of any kind. Please consult with your financial adviser before making an investment decision regarding any securities or financial instruments mentioned by TraderNick’s Forex Group, LLC. TraderNick’s Forex Group, LLC assumes no responsibility for your trading and investment results. All information on any of the platforms utilized by TraderNick’s Forex Group, LLC was obtained from sources believed to be reliable, but we do not warrant its completeness or accuracy, or warrant any results from the use of the information. TraderNick’s Forex Group, LLC, its employees, representatives, and affiliated individuals may have a position or effect transactions in the securities and financial instruments herein and or otherwise employ trading strategies that may be consistent or inconsistent with the provided strategies. Trading of any type involves very high risk and may not be suitable for all investors. TraderNick’s Forex Group, LLC, its subsidiaries and all affiliated individuals assume no responsibility for your trading and investment result. Read our full disclaimer here
Home
Edgefinder
VIP
Menu
homesmartphonelaptopmenu linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram