GBPCAD was higher yesterday and could be looking at a move towards resistance levels as the Canadian economy sees the release of employment numbers this afternoon. The pound has gained despite an increased stimulus program from the Bank of England (BoE).
The Canadian economy is expected to see 10k jobs added for October, which is lower than last month’s 378.2k number. Despite this, the unemployment rate is expected to dip to 8.8% from 9%. A worse-than-expected number could see a further boost for the pound, which has had its own jobs woes recently.
The BOE announced a £150bn boost to its stimulus program this week, which was larger than the £100bn economists had expected. The bank was also revising its unemployment forecasts to 7.75% in Q1 of 2020 compared to 4.5% previously as England sees another month-long lockdown.
Data yesterday showed that the Canadian trade deficit had widened and this was another boost for sterling. The deficit widened to C$3.25 billion, which was larger than the $2.47 billion, which was forecast by economists. There was also an upward revision to the August numbers by an additional C$760 million. Lower oil prices will be a headwind to narrowing the deficit so the Canadian central bank will be concerned about the latest lockdowns.
The GBPCAD has found support at the 1.7000 level and is now pushing higher with the 1.7300 level up ahead. A break there would see the pair attempt to take the 1.7500 level. Bullish traders could go long here but a stop near 1.7000 would be preferred. The Investing Cube team is currently available to help all levels of traders with the Forex Trading Course or one-to-one coaching.
