Why focus on the “Carney Cross” in GBP/CAD is due first to its 87 pip daily range, a range surpasses GBP/JPY at today’s 70 pips. Secondly, GBP/USD Correlates + 90% to all its major cross pairs to include GBP/NOK, GBP/SEK and GBP/CAD. GBP pairs currently runs on all cylinders. The only pair to hold the running on all cylinder distinction is NZD/USD and its major cross pairs while EUR and AUD cross pair prices struggle. Lastly, the Carny Cross at 87 pips should provide terrific volatility at Wednesday’s BOC meeting.
The big break lines above intraday for GBP/CAD to travel higher is located at 1.7280 and 1.7294. Neither points are expected to break today due to the many resistance points built into today’s prices especially 1.7234 and 1.7237. Higher above 1.7294 means next targets above are found at 1.7372. In the larger picture, significant break points are located at 1.7483, 1.7555 and 1.7557. All significant to take GBP/CAD higher yet 1.7577 is most vital because its a range point rather than a market trading level.
The base in GBP/CAD is located at 1.6848 and today’s bottom is found at 1.7122. The 1.7122 bottom is reinforced by supports just below at 1.7114 and 1.7113. To achieve bottoms then GBP/CAD must cross below 1.7165, 1.7143 and 1.7131. If GBP/CAD reaches 1.7122 bottoms, longs must come back to 1.7165. Why 1.7165 is because a break below 1.7189 begins a fresh downtrend to see in coming days targets achieved at 1.7015 and 1.6990. GBP/CAD will be volatile in days ahead as the BOC meeting approaches its Wednesday morning decision.
Brian Twomey, Inside the Currency Market, btwomey.com