GBP/CAD: Weakness set to extend after strong reversal signal – Scotiabank

GBP/CAD price action is weakening, economists at Scotiabank report.

A deeper retracement towards the 1.67/1.68 zone now looks quite likely

The Pound tested 1.7330/35 three times since late last week but met solid resistance on each occasion. Hefty losses on the week so far point to a major, bearish reversal developing. Currently, weekly price action is shaping up to form a bearish ‘Engulfing Line’ signal. A low close on the week (at or near current levels) will confirm. 

Sterling has already given back more than half of the late June/early July gains and a deeper retracement towards the 1.67/1.68 zone now looks quite likely (daily trend support at 1.6789 currently). Note the daily DMI signal is poised to turn negative for the GBP.