GBP sentiment is very positive after today’s U.K. data. Total industrial production increased by 0.9% between January and February, well above the 0.3% forecast, while Manufacturing Production boasted a 1% increase against the same 0.3% forecast.
On the opposite side, the Canadian Dollar is suffering after Housing Starts declined below 190,000 units for the first time in six months, down to 156,823. Building Permits dropped 11,6%, well below the forecasted -2.4%.
Technical Analysis
The break below the 1.8278 support was short lived, as GBP/CAD is crossing back above it after bouncing off of February’s pivot zone at 1.8183.
The pair is heading towards 0.8320, the 50 Simple Moving Average on the 4H timeframe, and it will also test the bearish trendline. With 4H stochastic not yet in overbought territory and sentiment favoring a correction, price is unlikely to reject from the trendline. Above the trendline GBP/CAD is likely to complete a 61.8% Fibonacci correction up to 1.8461.
The pivot zone at 1.8275 is expected to provide support from now on for this
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Prepared by Alexandru Z., Chief Currency Strategist at Capital Trust Markets
