Higher oil prices push down GBPCAD

The British pound has been falling recently against the American dollar for example, but we can see a strong decline against the Canadian dollar as well. As oil prices have risen to multiyear highs, the loonie (nickname for the Canadian dollar) took advantage of it. As Canada´s economy largely depends on its oil production and oil prices, higher oil prices make its currency stronger.

The GBPCAD pair hit a support level (C) on the daily chart and has a clear way to a reaction to the 50 moving average or the 1.7520 – 1.7600 resistance level (A). Depending on price movements around this area investors should look for a breakout to the upside and then test the resistance level at B, or prices could fall back from level A to the current support level (C). In case of further weakness the pair could break through this support and fall to its December low at 1.6780 (D)