The GBP/CAD advanced once again, extending its weekly rally up to 2.0512, the highest of the month following the monetary policy announcement by the Bank of England (BoE). The technical bias already remains bullish because of a Higher High in the recent wave on daily chart.

Meanwhile the Canadian dollar was weighed by tepid local housing data. Oil had little saying in the cross, as the commodity surged once again, despite US stockpiles rose by 2.6 million barrels last week.

WTI crude oil barrel stands above the $45.00 level, pretty much unchanged from last Friday’s close.

Technical Analysis

Technically, the 1 hour GBP/CAD chart for shows its gaining upward potential, as the 20 SMA heads slightly higher below the current price, while providing an immediate short term support. In the same chart, the technical indicators aim higher in positive territory.

Whilst the 4 hours chart shows quite a similar picture, as the price holds above a bullish 20 SMA, whilst the technical indicators stand directionless in positive territory.

BoE Monetary Policy

The Bank of England voted 8-1 to keep interest rates on hold at 0.5%. The bank also lowered its estimate for the UK’s economic growth in the third quarter of this year from 0.7% down to 0.6%.

In its summary, the committee said: “Developments since then have increased the risks to prospects in China, as well as to other emerging economies.”

It added: “Global developments do not as yet appear sufficient to alter materially the central outlook described in the August Report, but the greater downside risks to the global environment merit close monitoring for any impact on domestic economic activity.”

It said that the reason for reducing its UK growth forecast had been the latest run of poor manufacturing and industrial production figures.

Trade Idea

Considering the overall technical and fundamental outlook, buying the pair around current levels could be a good strategy in short to medium term.

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