Pound-Canadian Dollar could stay supported if trade tensions weigh on CAD, while firmer oil prices may help the Loonie recover. The Pound Canadian Dollar (GBP/CAD) exchange rate rose slightly on Monday amid a muted but positive response to a speech from the UK Chancellor.
At the time of writing, GBP/CAD was trading at CA$1.8718, up marginally on the day.
Latest — Exchange Rates:
Pound to Canadian Dollar (GBP/CAD): 1.870449 (+0.01%)
Euro to Canadian Dollar (EUR/CAD): 1.606041 (-0.06%)
Dollar to Canadian Dollar (USD/CAD): 1.38136 (-0.17%)
DAILY RECAP:
The Pound (GBP) traded with modest gains on Monday as markets reacted to a speech from UK Chancellor John Healey.
Healey reiterated his commitment to fiscal discipline, attempting to soothe recent concerns about bond market turmoil. He also focused heavily on driving growth in the UK, pointing to government investment, innovation, devolution and reduced red tape as ways to get the country’s economic cogs whirring.
The reaction to the Chancellor’s speech seemed somewhat positive, although the impact was muted. Sterling edged up against many of its peers but the gains were limited in scope.
Meanwhile, the crude-linked Canadian Dollar (CAD) was mixed on Monday as oil prices wavered.
Crude initially ticked higher amid ongoing tensions in the Middle East, before easing back during European trade.
CAD investors also seemed cautious ahead of Canadian counter-tariffs on US goods, due to take effect on Tuesday.
Near-Term GBP/CAD Forecast: Oil Price Movements to Drive the Pairing? Looking forward, a lack of UK and Canadian data on Tuesday could leave the GBP/CAD exchange rate to trade primarily on external factors.
Global crude prices could be key, with investors keeping an eye on events in the Middle East. Escalating tensions could see oil prices climb, particularly with the US and Iran recently threatening to target oil tankers and energy companies – which in turn could boost the crude-linked Canadian Dollar.
Conversely, if shipping picks up through a new route in the Strait of Hormuz agreed by Iran and Oman, easing oil prices could dent CAD.
Furthermore, the Canadian Dollar could face headwinds amid US-Canada trade tensions. If Washington announces further retaliatory measures as Canada’s tariffs come into effect, CAD could slide.
Exchange Rates UK Research Our currency coverage draws on live market data, official economic releases and published bank research.
Pound-Canadian Dollar could extend its decline if UK GDP disappoints, while higher oil prices may provide further support for the Loonie. The Pound to Canadian Dollar (GBP/CAD) exchange rate retreated last week as fears that a rise in borrowing costs could pose a risk to the UK's upcoming Autumn budget.
At the time of writing, the GBP/CAD exchange rate traded at CA$1.8718. Down around 0.5% from the start of last week’s session.
Latest — Exchange Rates:
Pound to Canadian Dollar (GBP/CAD): 1.87 (-0.02%)
Euro to Canadian Dollar (EUR/CAD): 1.605723 (-0.08%)
Dollar to Canadian Dollar (USD/CAD): 1.38328 (-0.03%)
DAILY RECAP:
Pound (GBP) struggled to make headway last week, with Sterling bearing the brunt of the turbulence sweeping through global bond markets.
UK gilts were among the hardest hit, with the 10-year gilt yield breaking above 5.25% and striking a 19-year high, while yields on 30-year gilts climbed to their highest levels since 1998.
Although the sharp rise in yields formed part of a broader sell-off in government bonds, concerns that higher borrowing costs could eat further into the limited fiscal headroom available to Chancellor John Healey ahead of his first Autumn Budget, meant there was a disproportionate impact on Sterling.
The Canadian dollar (CAD) got off to an underwhelming start last week, with CAD demand being undermined by lingering concerns about a potential US-Canada trade war.
However, the 'Loonie' then received a shot in the arm in mid-week trade following the Bank of Canada's (BoC) latest interest rate decision.
While the BoC kept interest rates on hold as forecast, its guidance warned of upside risks to inflation, which investors interpreted as a hawkish nod to a potential need to tighten monetary policy in the future.
The end of the week then saw the publication of Canada's latest jobs report, with the 'loonie' coming under pressure, following a shock contraction in employment growth last month.
Near-Term GBP/CAD Forecast: Slowdown in UK GDP to Weigh on Sterling? Looking ahead to this week's session, the Pound to Canadian Dollar (GBP/CAD) exchange rate may extend its losses as markets digest the UK's latest GDP figures.
Economists expect month-on-month economic growth to have slowed in July, with a soft reading potentially likely to drag on Sterling if it is seen as weakening the odds of a Bank of England (BoE) rate hike later in the year.
Meanwhile, in the absence of any notable domestic data, movement in the 'loonie' may be tied to oil price dynamics, with further uncertainty in the Middle East potentially propelling the commodity and CAD exchange rates higher.
Exchange Rates UK Research Our currency coverage draws on live market data, official economic releases and published bank research.
The Pound-Canadian Dollar could extend its recovery if the Bank of Canada turns dovish, while escalating US-Canada trade tensions remain a key risk for the Loonie. The Pound to Canadian Dollar (GBP/CAD) exchange rate rallied last week as markets were spooked by a sharp escalation in trade tensions between the US and Canada.
At the time of writing, the GBP/CAD exchange rate traded at CA$1.8809. Up around 0.2% from the start of last week’s session.
Latest — Exchange Rates:
Pound to Canadian Dollar (GBP/CAD): 1.881686 (-0.09%)
Euro to Canadian Dollar (EUR/CAD): 1.610304 (-0.24%)
Dollar to Canadian Dollar (USD/CAD): 1.39034 (+0.37%)
DAILY RECAP:
The Canadian dollar (CAD) faced significant selling pressure last week amid concerns over the potential economic repercussions of a US-Canada trade war.
Following the collapse of US-Canada trade talks at the end of the previous week, US President Donald Trump imposed a new 50% tariff on a range of Canadian goods, with Canadian Prime Minister Mark Carney announcing matching tariffs on US imports.
Given the importance of the US market to Canada's economy, CAD investors were understandably unnerved by the threat of a trade war between the two countries.
The Canadian Dollar's losses were further compounded by a pullback in oil prices, with Brent crude retreating to around $88 per barrel amid diplomatic efforts in the Middle East to reopen the Strait of Hormuz.
Closing out the week was the publication of Canada's latest GDP figures, with a sharp rebound in growth in the second quarter helping the 'Loonie' to claw back some of its losses from earlier in the session.
The Pound (GBP) initially finding support last week after analysis suggested UK productivity could be recovering more strongly than official data indicates.
That initial boost proved difficult to maintain, however, with a thin domestic economic calendar leaving Sterling without a clear catalyst for movement,
Fresh concerns over household finances then began to weigh on the Pound in the second half of the week after it was confirmed that the UK's energy price cap will rise to a three-year high from October.
Near-Term GBP/CAD Forecast: Dovish BoC to Weigh on the 'Loonie'? In addition to ongoing US-Canadian trade war developments, the Pound to Canadian Dollar (GBP/CAD) exchange rate will also be influenced by the Bank of Canada's (BoC) latest interest rate decision this week.
The BoC is widely expected to leave interest rates on hold following its September, meeting, placing the focus for CAD investors on the bank's forward guidance.
If the bank signals the potential need to adopt more accommodating monetary policy to help support the Canadian economy in its trade dispute, we are likely to see the 'Loonie' extend its losses.
Meanwhile, the UK economic calendar remains relatively light this week. August's finalised services PMI could offer Sterling some support, but otherwise the Pound is likely to remain sensitive to broader market sentiment and currency trends.
Exchange Rates UK Research Our currency coverage draws on live market data, official economic releases and published bank research.
The Pound-Canadian Dollar exchange rate could extend its recent gains if US-Canada trade tensions deepen, although firmer oil prices may offer the Loonie some support. The Pound Canadian Dollar (GBP/CAD) exchange rate rose sharply on Monday, hitting its highest level in 17 days, as a trade war erupted between the US and Canada.
At the time of writing, GBP/CAD was trading at CA$1.8855, up 0.4% on the day and at its highest level in over two weeks.
Latest — Exchange Rates:
Pound to Canadian Dollar (GBP/CAD): 1.888718 (+0.55%)
Euro to Canadian Dollar (EUR/CAD): 1.615651 (+0.50%)
Dollar to Canadian Dollar (USD/CAD): 1.38566 (+0.65%)
DAILY RECAP:
The Canadian Dollar (CAD) faced heavy selling pressure on Monday as markets reacted to a breakdown in US-Canada trade talks.
Negotiations collapsed on Friday, with Washington imposing 50% tariffs on $20bn worth of Canadian goods. Canada retaliated, plunging the North American countries into a trade war.
Concerns about how this could impact the Canadian economy weighed heavily on CAD on Monday, as the US is Canada’s largest trading partner.
Meanwhile, a drop in oil prices also put pressure on the crude-linked ‘Loonie’.
Turning to the Pound (GBP), Sterling was muted on Monday amid a lack of UK economic data.
This left the British currency to trade without a clear overall direction, with Sterling facing mixed movement against its peers.
Near-Term GBP/CAD Forecast: US-Canada Trade War to Weigh on the ‘Loonie’? Looking forward, the only economic data due Tuesday is Canada’s preliminary wholesale sales for July. A forecast 1.3% slump in sales growth could pressure the ‘Loonie’.
However, CAD investors may be focused on US-Canada trade tensions and oil price dynamics. Concerns about an escalating trade war could pile pressure on the Canadian Dollar, while CAD could find some cushioning if oil prices rise amid the conflict in the Middle East.
As for the Pound, UK economic data is in short supply. As a result, movement in Sterling may be limited.
Exchange Rates UK Research Our currency coverage draws on live market data, official economic releases and published bank research.
The Pound-Canadian Dollar rate could remain under pressure if Canadian GDP rebounds strongly and lifts Bank of Canada rate hike expectations. The Pound to Canadian Dollar (GBP/CAD) exchange rate ticked lower last week as a fresh rise in oil prices bolstered the 'Loonie'.
At the time of writing, the GBP/CAD exchange rate traded at CA$1.8754. Down around 0.2% from the start of last week’s session.
Latest — Exchange Rates:
Pound to Canadian Dollar (GBP/CAD): 1.878441 (-0.10%)
Euro to Canadian Dollar (EUR/CAD): 1.607534 (-0.20%)
Dollar to Canadian Dollar (USD/CAD): 1.3767 (-0.11%)
DAILY RECAP:
The Canadian dollar (CAD) edged higher last week with the commodity-linked currency drawing support from a renewed surge in oil prices.
Brent crude rose to around $94 a barrel last week as the 60-day memorandum of understanding between Washington and Tehran expired without a final peace deal or an agreed extension, reinforcing concerns that the disruption to energy supplies could persist.
In terms of domestic data, the Canadian Dollar was seemingly unfazed by a stronger-than-expected inflation print and sizable contraction in Canadian retail sales.
The Pound (GBP) put in a mixed performance last week, with the currency fluctuating against most of its rivals amid a flurry of high-impact UK economic data.
A mixed batch of releases left investors struggling to gauge the next move from the Bank of England (BoE). Weaker employment figures followed by an unexpected acceleration in inflation weighed on Sterling during the first half of the week, as the conflicting signals complicated the outlook for interest rates.
The Pound then attempted to regain ground, only for the recovery to falter after a sharp decline in UK retail sales and a shock rise in UK government borrowing last month.
Near-Term GBP/CAD Forecast: Rebound in Canadian GDP to Boost the 'Loonie'? Looking to the week ahead, the primary catalyst of movement for the Pound to Canadian Dollar (GBP/CAD) exchange rate is likely to be the publication of Canada's latest GDP data.
Consensus estimates predict Canadian GDP will have rebounded strongly in the second quarter, lifting the country out of the technical recession it slipped into in the first quarter of the year.
This in turn could improve the odds of the Bank of Canada (BoC) delivering an interest rate hike later in the year, boosting the appeal of the 'Loonie'.
Meanwhile, a relatively quiet UK economic calendar should leave Sterling largely dependent on wider risk appetite and developments across global markets.
Exchange Rates UK Research Our currency coverage draws on live market data, official economic releases and published bank research.
Pound-Canadian Dollar could regain ground if UK jobs data beats forecasts, although firmer oil prices may keep the Loonie supported. The Pound to Canadian Dollar (GBP/CAD) exchange rate held in a narrow range on Monday as investors were seemingly unfazed by Canada's latest inflation figures.
At the time of writing, the GBP/CAD exchange rate was trading at CA$1.8845. Down roughly 0.2% from the start of Monday’s session.
Latest — Exchange Rates:
Pound to Canadian Dollar (GBP/CAD): 1.880949 (+0.17%)
Euro to Canadian Dollar (EUR/CAD): 1.607285 (+0.12%)
Dollar to Canadian Dollar (USD/CAD): 1.38694 (-0.04%)
DAILY RECAP:
The Canadian dollar (CAD) was rangebound at the start of this week, following the release of Canada's latest consumer price index.
According to data published by Statistics Canada, Canadian inflation accelerated from 2.8% to 3% in July, outpacing forecasts it would only rise to 2.9%.
Core inflation also rose above forecasts as it climbed from 2.1% to 2.3% over the same period.
The rise in Canadian CPI was primarily attributed to energy prices, with prices at the fuel pump rising 25% year-on-year due to the ongoing disruption to shipping through the Strait of Hormuz.
However, the 'Loonie' struggled to build any support off of the inflation data as analysts suggested the acceleration in price growth is unlikely to move the needle regarding a potential Bank of Canada (BoC) interest rate hike later in the year.
The Pound (GBP) traded sideways against the majority of its peers on Monday, as GBP investors braced themselves for a run of high-impact UK economic data being published over the coming week.
The UK's latest inflation and employment releases are likely to prove the most influential of this glut of data as they are seen as the most likely to shape Bank of England (BoE) monetary policy in the coming months.
If this data points to a resilient UK economy, it will likely harden BoE rate hike bets and strengthen Sterling sentiment.
However, if the data is not strong enough to support current BoE policy expectations, the Pound could face significant headwinds.
Near-Term GBP/CAD Forecast: can UK jobs data give Sterling a lift? Looking ahead, the Pound to Canadian Dollar (GBP/CAD) exchange rate may strengthen on Tuesday as the UK data deluge is kicked off with the publication of the UK's latest jobs report.
June's data is expected to report a welcome fall in unemployment, amid an uptick in employment growth.
However, the accompanying earnings data may ultimately cap any resulting upside potential in the Pound, as falling wage growth may ease pressure on the BoE to tighten monetary policy.
Meanwhile, movement in the 'Loonie' may be tied to oil prices on Tuesday, with CAD exchange rates likely to strengthen if Brent crude rises back toward $90 per barrel.
Exchange Rates UK Research Our currency coverage draws on live market data, official economic releases and published bank research.
The British Pound could rebound against the Canadian Dollar if softer inflation weighs on the Loonie, while firmer UK jobs and CPI data support Sterling. The Pound Canadian Dollar (GBP/CAD) exchange rate wavered down to a two-week low last week, despite UK GDP figures, as oil prices rose.
At the time of writing, GBP/CAD was trading at CA$1.8787, down marginally on the week.
Latest — Exchange Rates:
Pound to Canadian Dollar (GBP/CAD): 1.878157 (+0.02%)
Euro to Canadian Dollar (EUR/CAD): 1.605158 (-0.01%)
Dollar to Canadian Dollar (USD/CAD): 1.38723 (-0.02%)
DAILY RECAP:
The Pound (GBP) started the week on the front foot, with Sterling edging higher despite a lack of any clear catalyst for the move.
A quiet run of economic data on Tuesday and Wednesday left GBP without much fresh impetus, and the currency traded within a tight range. As a result, the Pound slipped against its stronger peers.
Sterling continued struggling to attract support following Thursday’s UK GDP figures. Although the British economy posted solid growth during the first half of 2026, there are increasing concerns that this rate of expansion could be hard to maintain through the remainder of the year.
The Pound was once again short of direction on Friday, as GBP fluctuated without settling into a clear trend.
Meanwhile, the commodity-sensitive Canadian Dollar (CAD) faced uneven movement last week amid some volatility in the oil market, but ultimately the currency trended higher as crude prices climbed.
Brent oil – the global benchmark for oil prices – surged on Monday and then broke above $90 per barrel on Tuesday and again on Wednesday.
The rise in oil prices came amid simmering tensions in the Middle East, where the prospect of an imminent peace deal between the US and Iran has faded once again.
However, crude prices eased back towards the end of the week, seeing CAD trim its gains.
Near-Term GBP/CAD Forecast: UK and Canadian Inflation Figures in Focus Looking ahead, several key UK data releases are likely to shape Sterling’s performance this week.
Tuesday’s employment figures will be the first major test, with relatively healthy labour market conditions over the three months to June potentially giving the currency a lift.
Attention will then turn to Wednesday’s consumer price index figures. A rise in inflation in line with expectations for July could strengthen bets on Bank of England (BoE) interest rate hikes, potentially giving the Pound additional support.
The week rounds off on Friday with July’s retail sales figures and the preliminary PMIs for August. A disappointing retail performance could put pressure on GBP, although continued strength across the services sector could limit any downside.
As for the Canadian Dollar, the week kicks off with Canada’s latest inflation figures on Monday. If inflation cooled in July, as expected, CAD could weaken.
A forecast 0.5% contraction in Canadian retail sales in July could add to the pressure on the ‘Loonie’ on Friday.
Meanwhile, oil price dynamics could drive volatility in CAD exchange rates.
Exchange Rates UK Research Our currency coverage draws on live market data, official economic releases and published bank research.
TL;DR: GBP/CAD looks ready to resume its uptrend after rebounding from the 55-day EMA, but a sustained breakout depends on two separate forces — Friday’s volatile Canadian jobs report and whether oil’s renewed strength above $86 continues to support the Canadian Dollar.
Why the Correction May Already Be Over After nearly a month of consolidation, GBP/CAD is showing signs that its broader uptrend may be ready to resume. The pair has rebounded convincingly after holding the 55-day EMA, suggesting the pullback from 1.9042 was a healthy correction rather than a change in trend. A retest of the July high now looks likely. Whether GBP/CAD can convert that into a sustained breakout, however, will depend on two very different forces: this week’s Canadian labor market data and the direction of oil prices.
Force One: The Scheduled Risk — A Volatile Canadian Jobs Report The first is the easier of the two to assess. Canada’s July employment report is expected to show job growth of 15k, with the unemployment rate holding steady at 6.5%. Those numbers would broadly indicate a labor market that remains stable despite slowing economic momentum. Yet recent history suggests caution — Canada’s employment data have repeatedly produced large surprises this year, swinging from an unexpected -18k decline in April to an 88k surge in May, before moderating to 18k in June. That volatility means another downside surprise cannot be dismissed.
A softer employment report would likely weaken the Canadian Dollar by reinforcing the Bank of Canada’s patient policy stance. The BoC has kept rates unchanged for five consecutive meetings since its October 2025 rate cut, repeatedly signaling it’s prepared to look through temporary inflation shocks as long as underlying price pressures remain contained. Weak labor market data would support that approach by reducing the urgency for any policy tightening — and could provide the catalyst for GBP/CAD to revisit 1.9042.
Force Two: The Unscheduled Risk — Oil’s Renewed Grip on the Canadian Dollar The bigger challenge lies beyond Friday’s data. The main reason GBP/CAD lost momentum after reaching 1.9042 in early July was the sharp reversal in oil prices. Brent crude had bottomed near $70 before surging above $100 following the collapse of the 60-day US-Iran ceasefire, restoring strong support for the commodity-linked Canadian Dollar and forcing GBP/CAD into a month-long consolidation.
The pair’s rebound from 1.8709 has coincided with Brent’s retreat from above $100 to around $80, which eased some of that support for the Canadian Dollar. But oil has since recovered above $86 as geopolitical tensions remain unresolved, once again acting as a headwind for Sterling. The current advance in GBP/CAD therefore looks less constrained by Canadian domestic fundamentals than by the renewed resilience of crude prices.
Why the Geopolitical Backdrop Hasn’t Actually Changed The geopolitical backdrop has changed little despite alternating headlines from Washington and Tehran. President Donald Trump has shifted from projecting confidence in imminent negotiations to warning that Iran faces a “last chance,” while Tehran continues to insist there are no immediate plans for direct talks with the United States, limiting engagement to Oman’s mediation over the Strait of Hormuz. The fundamental disagreement over the future of the waterway remains unresolved, leaving markets reluctant to remove the geopolitical premium embedded in oil prices.
That distinction is important. A weak Canadian employment report may be enough to propel GBP/CAD back toward 1.9042, but it’s unlikely to be sufficient for a sustained breakout if Brent remains elevated. For Sterling bulls, Friday’s jobs report could provide the trigger — but whether the rally extends beyond the July high will depend far more on whether oil prices retreat again, which in turn requires credible progress toward renewed US-Iran negotiations rather than another round of conflicting political statements.
ActionForex’s Technical View on GBP/CAD The technical outlook reflects that balance between constructive momentum and lingering macro risks. GBP/CAD remains firmly within the rising channel from 1.8017, and this week’s rebound from the 55-day EMA, now around 1.8716, strengthens the case that the correction ended at 1.8709. A break above 1.9042 would open the way toward the 61.8% projection of 1.8299 to 1.9042 from 1.8709, at 1.9168, in the near term.
However, rejection by 1.9042 will set up another leg to extend the corrective pattern, with risk of a deeper fall through 1.8709. In that case, strong support should be seen from the rising channel floor, now at 1.8617, to bring a rebound.
Key Takeaways GBP/CAD’s rebound from the 55-day EMA suggests the pullback from 1.9042 was a correction, not a trend change, with a retest of the July high likely. Canada’s July jobs report (consensus: 15k job growth, 6.5% unemployment) carries elevated surprise risk given three large misses already this year. A weak jobs print could push GBP/CAD back toward 1.9042, but a sustained breakout depends more on oil, which has recovered above $86 after briefly easing from $100. The US-Iran standoff over the Strait of Hormuz remains unresolved despite shifting rhetoric, keeping a geopolitical premium embedded in oil and a headwind on Sterling. 1.9042 is the key resistance; a break opens 1.9168, while rejection risks a deeper pullback toward 1.8709, with the rising channel floor at 1.8617 as the next support.
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The Pound to Canadian Dollar (GBP/CAD) exchange rate recovered to 1.8895 at Friday’s close, reversing much of its early-week decline as Sterling strengthened following the Bank of England decision.
Canadian trade and employment figures will provide the main tests for the GBP/CAD this week.
Latest — Exchange Rates:
Pound to Canadian Dollar (GBP/CAD): 1.890452 (+0.05%)
Euro to Canadian Dollar (EUR/CAD): 1.618402 (+0.16%)
Dollar to Canadian Dollar (USD/CAD): 1.40288 (+0.10%)
WEEKLY RECAP:
GBP/CAD slipped below 1.8750 early last week before rallying through the final three sessions.
Pound Sterling drew support after the Bank of England held Bank Rate at 3.75%, with three policymakers voting for an immediate increase.
Governor Andrew Bailey played down the urgency of another move, and markets reduced their expectations for a September hike. Even so, UK yield spreads remain supportive enough to limit Sterling selling.
The Canadian Dollar also finished July on a firmer footing.
Canadian GDP rose 0.3% in May, beating forecasts, while April’s expansion was revised up to 0.6%. An initial estimate placed second-quarter annualised growth at 3.4%, comfortably above the Bank of Canada’s 2.5% forecast.
The stronger figures reinforced expectations that the BoC will leave rates unchanged over the coming months.
Scotiabank cautioned that the US-Canada yield gap remains “a formidable restraint on the CAD”, although recent price action suggests some momentum is shifting in the Loonie’s favour.
ING remains more guarded, arguing that the Canadian Dollar’s recovery should be slow because its carry appeal is limited and USMCA uncertainty remains a potential drag.
Near-Term GBP/CAD Forecast: Canadian Jobs Report Takes Centre Stage For Pound Sterling, Monday’s final manufacturing PMI is followed by Wednesday’s services PMI and Thursday’s construction survey.
Another weak construction reading would reinforce the BoE’s cautious assessment of UK growth.
Canadian markets are closed for Monday’s Civic Holiday.
Tuesday brings Canada’s trade balance, forecast to narrow from C$4.2 billion to C$3.0 billion, followed by the manufacturing PMI.
Friday’s labour report is the main event. Employment is forecast to rise by 15,000, while unemployment is expected to remain at 6.5%.
Stronger hiring could support the Canadian Dollar and pull GBP/CAD towards 1.8750. A weak report, particularly alongside softer oil prices, could lift the pair through 1.90 and towards 1.9050.
Exchange Rates UK Research Our currency coverage draws on live market data, official economic releases and published bank research.
Hello fellow traders. In this technical blog we’re going to take a quick look at the Elliott Wave charts of GBPCAD Forex pair published in members area of the website.
Recently, GBPCAD formed a 3-wave pullback after a rally, a textbook example of an Elliott Wave bullish sequence. Price completed a clear 3-wave move down from the peak and found support at the Equal Legs zone (buying area).In the following analysis, we explain the Elliott Wave pattern and the market outlook.
GBPCAD Elliott Wave 1 Hour Chart 07.20.2026 GBPCAD is forming an 3-wave pullback from recent highs. At the moment, structure of the pull back looks incomplete. We expect to see more downside to complete the pull back. As our members know , the buying zone is derived by measuring the Equal Legs area using the Fibonacci extension tool. The ideal support area comes in at 1.8774-1.862 . At that zone, we expect buyers to step in and take control, pushing the price higher in at least a three-wave bounce, or ideally extending toward new highs.
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GBPCAD Elliott Wave 1 Hour Chart 07.30.2026 The forex pair made decline as expected. GBPCAD found buyers at the Equal Legs zone, producing a solid reaction from that area. As a result, long positions taken from the Equal Legs zone are now risk-free. We expect GBPCAD to continue trading higher, with a break above the (3) peak -1.9043 needed to confirm that the next leg up is in progress.
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We also teach our members in live analysis sessions how to identify incomplete bullish and bearish sequences. Even a 14-day trial, is enough to noticeably improve your trading analysis and forecasting approach.
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Pound-Canadian Dollar could extend gains if oil prices retreat further, although the Bank of England remains the key driver. The Pound to Canadian Dollar (GBP/CAD) exchange rate edged higher on Monday as hopes of a pause in the US-Iran conflict triggered a sharp fall in oil prices and weakened the commodity-linked Canadian Dollar. However, Sterling’s gains remained limited as lower energy costs reduced expectations of a more hawkish Bank of England decision later this week.
The Pound to Canadian Dollar (GBP/CAD) exchange rate edged higher on Monday, although gains were limited as falling oil prices weighed on the Canadian Dollar while softer Bank of England rate expectations capped Sterling.
At the time of writing, GBP/CAD was trading around CA$1.8797, up approximately 0.1% on the day.
Latest — Exchange Rates:
Pound to Canadian Dollar (GBP/CAD): 1.878553 (+0.02%)
Euro to Canadian Dollar (EUR/CAD): 1.604752 (+0.12%)
Dollar to Canadian Dollar (USD/CAD): 1.41063 (+0.08%)
DAILY RECAP:
The Canadian Dollar (CAD) came under pressure at the start of the week as renewed hopes for a ceasefire in the Middle East triggered a sharp decline in oil prices.
Washington paused its attacks on Iran for a third consecutive night, while Tehran also halted retaliatory action, raising hopes that diplomatic efforts could gain momentum.
The easing in geopolitical tensions prompted a 6% fall in crude prices as markets reopened after the weekend, weighing on the commodity-linked Canadian Dollar.
Meanwhile, the Pound (GBP) struggled to capitalise on the Canadian Dollar's weakness as falling oil prices prompted markets to scale back expectations for a more hawkish Bank of England (BoE).
Although policymakers are still widely expected to leave interest rates unchanged later this week, some investors had anticipated that the recent surge in energy prices would encourage a firmer policy tone.
With oil prices retreating alongside hopes for a ceasefire, markets increasingly expect the Bank of England to maintain a cautious approach, limiting Sterling's appeal.
Near-Term GBP/CAD Forecast: UK Politics and Oil Prices to Drive the Pairing Looking ahead, a quiet UK economic calendar may leave domestic political developments as the main driver of the Pound.
As Prime Minister Andy Burnham enters his second week in office, investors will continue to scrutinise any new policy announcements, particularly spending commitments, tax cuts and how they are expected to be funded.
Fresh concerns over the UK's fiscal outlook could place renewed pressure on Sterling.
Meanwhile, with little Canadian economic data scheduled, the ‘Loonie’ is likely to remain driven by oil price movements. If the pause in Middle East hostilities continues and crude prices extend their recent decline, the Canadian Dollar could remain under pressure.
Exchange Rates UK Research Our currency coverage draws on live market data, official economic releases and published bank research.
GBP/CAD could recover towards 1.8900 this week, although the Bank of England decision, UK fiscal concerns and volatile oil prices will determine whether the rebound can hold. The Pound to Canadian Dollar exchange rate (GBP/CAD) opened the new week near CA$1.8820, having recovered from last week’s three-week low around CA$1.8740.
GBP/CAD nevertheless ended the previous week approximately 0.4% lower, as UK fiscal concerns weighed on Pound Sterling while rising oil prices supported the commodity-linked Canadian Dollar.
Latest — Exchange Rates:
Pound to Canadian Dollar (GBP/CAD): 1.8819 (+0.20%)
Euro to Canadian Dollar (EUR/CAD): 1.608296 (+0.35%)
Dollar to Canadian Dollar (USD/CAD): 1.4096 (+0.01%)
Image: GBP/CAD Technical Outlook Ahead of the Bank of England Decision Near-term momentum has improved after GBP/CAD moved back above the 1.8800 area.
The 15-minute chart shows the pair holding above its short-term moving average and session VWAP, while the relative strength index remains positive without signalling an extreme overbought position.
Initial resistance is located around 1.8830. A sustained break above this level could open the way towards 1.8870 and then the psychologically important 1.8900 area.
On the downside, 1.8800 is the first support to watch. A break beneath 1.8780 would weaken the recovery and expose last week’s low near 1.8740.
Near-Term GBP/CAD Forecast: Bank of England Holds the Key Thursday’s Bank of England decision will provide the week’s main test for Sterling.
The Bank is widely expected to leave interest rates unchanged at 3.75%, meaning the vote split, updated forecasts and guidance on future tightening will be more important than the decision itself.
At the previous meeting, two Monetary Policy Committee members voted for an immediate increase to 4.00%.
Further concern about the inflationary impact of elevated energy prices could therefore reinforce expectations that the Bank may raise rates later this year.
A relatively hawkish decision, particularly one that keeps a September increase under consideration, would support a GBP/CAD move through 1.8830 and towards 1.8900.
However, Pound Sterling could retreat if the Bank emphasises weaker growth, softer headline inflation or the risk that higher energy costs will damage demand rather than create persistent domestic inflation.
UK political and fiscal developments will remain an additional risk.
The Pound struggled last week after Prime Minister Andy Burnham appointed John Healey as Chancellor and investors questioned how the government’s proposed tax reductions would be funded.
This political uncertainty overshadowed stronger-than-expected UK retail sales and business activity figures, preventing Sterling from making a sustained recovery.
Oil Prices and Canadian GDP Could Support the Loonie For the Canadian Dollar, oil prices are likely to remain at least as important as domestic data.
Crude prices surged last week following attacks on Saudi tankers and infrastructure around the Red Sea, but fell sharply on Monday as a pause in US-Iran attacks encouraged hopes of renewed diplomacy.
Shipping disruption through the Bab el-Mandeb Strait means the risk premium has not disappeared, leaving CAD sensitive to further geopolitical headlines.
A renewed rise in Brent crude would probably favour the Canadian Dollar and could push GBP/CAD back towards 1.8780.
Conversely, a continued oil-price correction would remove an important source of CAD support.
Friday’s Canadian GDP report will provide the main domestic event.
Statistics Canada will publish May’s GDP figures alongside an advance estimate for June, following April’s 0.5% expansion.
Stronger growth would reinforce the downside risk for GBP/CAD.
Nevertheless, the central forecast is for the pair to remain supported above 1.8780, with a hawkish Bank of England outcome potentially driving a recovery towards 1.8870–1.8900.
GBPCAD currency pair recently reversed from the support area between the support level 1.8720 (which reversed the price multiple times at the end of June), lower daily Bollinger Band and the 61.8% Fibonacci correction of the upward impulse from May.
The upward reversal from this support zone stopped wave c of the earlier ABC retracement 4 from the start of July.
GBPCAD currency pair can be expected to rise to the next resistance level 1.8800 – former low of the previous correction a.
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The Pound to Canadian Dollar (GBP/CAD) exchange rate edged slightly higher on Monday as softer Canadian inflation weighed on the 'Loonie', although gains for Sterling were capped as investors awaited more policy detail from Prime Minister Andy Burnham.
At the time of writing, GBP/CAD was trading at CA$1.8875, up around 0.1% on the day.
Latest — Exchange Rates:
Pound to Canadian Dollar (GBP/CAD): 1.886772 (+0.02%)
Euro to Canadian Dollar (EUR/CAD): 1.604233 (+0.04%)
Dollar to Canadian Dollar (USD/CAD): 1.40557 (+0.25%)
DAILY RECAP:
The Pound (GBP) struggled to find momentum on Monday as markets reacted cautiously to Andy Burnham’s first address after taking office as Prime Minister.
Although Burnham outlined the government’s wider priorities, he offered few specific policy details. He said further announcements on measures to address the cost of living, including how these plans would be financed, would follow on Tuesday.
With investors left waiting for more tangible information, Sterling remained largely rangebound during the session.
A lack of significant UK economic data also meant the Pound had little in the way of domestic catalysts to drive movement.
Meanwhile, the Canadian Dollar (CAD) showed some resilience despite softer-than-forecast inflation figures and falling oil prices.
Canada’s latest consumer price index showed headline inflation cooling from 3.2% in May to 2.8% in June, while core inflation unexpectedly eased from 2.2% to 2.1%.
This put some pressure on the Canadian Dollar, although CAD avoided steeper losses.
A slight decline in oil prices also failed to notably dent the currency, with the crude-linked ‘Loonie’ appearing to draw some support from the fact that oil prices remain elevated following their recent rally.
Near-Term GBP/CAD Forecast: UK Jobs Data in the Spotlight Looking forward, attention shifts to the UK's latest employment data on Tuesday.
Forecasts suggest unemployment may have risen slightly from 4.9% to 5.0% in the three months to May. However, a predicted rise in employment could help limit downside pressure on the Pound.
Sterling markets will also be focused on the latest wage growth figures. Continued strength in earnings could provide support for the Pound and help it weather any weaker labour market signals.
Meanwhile, the Canadian Dollar may be driven by oil price dynamics. If crude prices continue to climb amid escalating tensions in the Middle East, the commodity-linked ‘Loonie’ could gain ground.
GBP/CAD has spent the past few weeks tracing out a clean five-wave rally on the 1-hour chart, and now the pair looks to be working through the correction that typically follows a completed impulse. Here’s a breakdown of the structure and what it could mean for the path ahead.
The Rally: A Textbook Five-Wave Advance
Starting from the June 22 low near 1.863, GBP/CAD pushed higher in a sequence that fits the classic five-wave impulse pattern:
Wave (i) kicked off the advance, followed by a shallow wave (ii) pullback that held well above the starting point. Wave (iii) was the strongest leg of the move, itself breaking down into a smaller five waves (i–v) as the pair accelerated toward the 1.895–1.900 area. Wave (iv) brought a brief, contained dip before buyers stepped back in. Wave (v) carried price to the cycle high just above 1.905, completing the five-wave structure and marking the top of the rally. That high represents the point where the bullish impulse likely finished, opening the door for a corrective pullback.
The Correction: An A-B-C (ZigZag) Pattern Taking Shape
What is an A-B-C (ZigZag) Pattern?
The image below illustrates an A‑B‑C Zigzag structure, similar to the one highlighted on the GBPCAD chart above.
A Zigzag structure in Elliott Wave Theory is a sharp three‑wave corrective pattern labelled A‑B‑C, with a distinct 5‑3‑5 subdivision. It represents a counter‑trend move and is one of the most common corrective formations.
Wave A → 5 sub‑waves (impulsive decline or rise depending on trend). Wave B → 3 sub‑waves (a smaller counter‑move). Wave C → 5 sub‑waves (another impulsive move, usually equal to or longer than Wave A). Trading Insights
Zigzags often signal continuation after correction, making them useful for identifying re‑entry points in the direction of the larger trend. Traders watch for Blue Box zones (high‑probability reversal areas) to align entries with the end of Wave C. Recognizing zigzags helps avoid mistaking them for trend reversals—they are corrective pauses, not new dominant trends. Now that we understand what a Zigzag correction is, we can clearly connect that concept to the corrective structure shown in the GBPCAD chart above.
Since topping out, GBP/CAD has been unwinding in a standard three-wave (A-B-C) correction:
Wave (a) dropped sharply off the highs, retracing a large chunk of the prior advance. Wave (b) brought a corrective bounce back up toward the 1.903 area — a classic “relief rally” that retraces part of wave (a) without exceeding the prior high. Wave (c) is now underway, pressing the pair back down toward the 1.884–1.876 zone, with a key Fibonacci extension level sitting around 1.876. As of the most recent update, price is trading around 1.884, right in the area where wave (c) is expected to find support and complete the pullback.
What Comes Next
Based on this count, the correction is viewed as a buying opportunity rather than a setup to sell. The expectation is for GBP/CAD to carve out a smaller, choppy dip-and-recovery pattern near current levels before turning back higher, targeting a resumption of the broader uptrend. A key support/invalidation zone sits down near 1.863 — a break below that level would call the entire bullish wave count into question.
The Final Leg Down Completed as Expected
Zooming into the internal structure of wave ((c)), price carved out a clean five-wave decline (labeled (i) through (v)) that bottomed right at the extreme of the expected support zone, just above 1.880. That low landed almost exactly on the invalidation level near 1.88016, which is precisely the kind of reaction technicians look for — a move that reaches into a well-defined support area, taps it, and reverses rather than breaking cleanly through it.
That low marks the completion of the entire corrective sequence from the 1.905 high: wave ((a)) down, wave ((b)) bounce back toward 1.903, and wave ((c)) down into the 1.880 extreme.
A Sharp, Decisive Reaction
What stands out most on this update is the strength of the reaction off that low. Rather than a slow, grinding recovery, GBP/CAD snapped back aggressively, rallying from the 1.880 extreme up through 1.890 and on toward the 1.900–1.902 area in a single strong push — essentially retracing the entire wave ((c)) decline in short order. That kind of sharp, impulsive reaction off a support extreme is typically read as a sign that the corrective phase has genuinely finished and that sellers were overwhelmed at the low.
Why the Extreme Mattered
This is a good example of why the 1.876–1.884 zone was flagged as the key area to watch in the first place. It wasn’t just a round-number guess — it lined up with:
The Fibonacci extension target near 1.876 The internal five-wave count of wave ((c)) reaching a natural completion point A structural invalidation level just below 1.880 that, as long as it held, kept the broader bullish wave count intact Price respected that confluence, printed the low, and turned — which is exactly the kind of reaction that gives a wave count credibility.
Bottom Line
GBP/CAD did exactly what the prior wave count anticipated: it pushed into the extreme of the support zone, completed a five-wave decline into that area, and reacted sharply higher — a textbook reaction at the extreme that reinforces the case for a resumption of the uptrend.
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The Pound to Canadian Dollar (GBP/CAD) exchange rate traded lower last week as UK political developments drove volatility while rising oil prices supported the commodity-linked Canadian Dollar.
At the time of writing, GBP/CAD was trading at CA$1.8861, down around 0.5% on the week.
Latest — Exchange Rates:
Pound to Canadian Dollar (GBP/CAD): 1.88631 (-0.31%)
Euro to Canadian Dollar (EUR/CAD): 1.60365 (-0.20%)
Dollar to Canadian Dollar (USD/CAD): 1.40207 (-0.14%)
DAILY RECAP:
The Pound (GBP) had a quiet start to the week as a sparse UK economic calendar left Sterling lacking fresh direction, opening it up to losses against stronger rivals.
Comments from Bank of England Governor Andrew Bailey added to the subdued mood after he warned about the UK's long-standing growth challenges. As a result, GBP/CAD slid to a near two-week low.
Sterling surged in the middle of the week as markets reassessed expectations for the next Chancellor under incoming Prime Minister Andy Burnham.
Confidence improved after Shabana Mahmood emerged ahead of Ed Miliband as the favourite for the role, with investors viewing Mahmood as the more fiscally credible candidate.
However, Sterling couldn’t hold on to its gains, despite data confirming the UK economy expanded by 0.1% in May.
Meanwhile, the crude-linked Canadian Dollar (CAD) strengthened early last week as renewed conflict in the Middle East saw oil prices climb higher.
This propelled the ‘Loonie’ to a near two-week high against the Pound.
Midweek, CAD faced some pressure following the Bank of Canada’s monetary policy decision. The bank left rates unchanged and struck a broadly cautious tone, thereby dampening interest rate hike bets.
However, the Canadian Dollar was able to quickly regain lost ground on Thursday, and extended its upside on Friday, as crude prices continued to rise.
Near-Term GBP/CAD Forecast: Inflation Figures in Focus Looking ahead, the spotlight for GBP investors will first fall on the UK's latest labour market report, due on Tuesday.
If the data points to a resilient jobs market, with unemployment unchanged and wage growth remaining robust, Sterling may find fresh support.
Attention will then turn to Wednesday's UK consumer price index. Should June's figures show headline inflation eased further, the Pound may come under renewed pressure.
The week's final UK releases arrive on Friday, with June's retail sales data and the preliminary PMIs for July. A slowdown in consumer spending, coupled with another contraction in the services sector, could see Sterling end the week on the back foot.
As for the Canadian Dollar, the week kicks off with Canada’s latest CPI. A forecast cooling of inflation in June could dent CAD.
However, the crude-linked currency may attract support throughout the week if the US-Iran conflict continues to intensify, driving up the price of oil.
The Pound to Canadian Dollar (GBP/CAD) exchange rate strengthened on Wednesday after the Bank of Canada maintained interest rates and struck a cautious tone on the outlook for monetary policy.
At the time of writing, GBP/CAD was trading at CA$1.8903, up around 0.4% on the day.
Latest — Exchange Rates:
Pound to Canadian Dollar (GBP/CAD): 1.89695 (+0.77%)
Euro to Canadian Dollar (EUR/CAD): 1.606759 (+0.09%)
Dollar to Canadian Dollar (USD/CAD): 1.40514 (-0.01%)
DAILY RECAP:
The Canadian Dollar (CAD) retreated on Wednesday as markets digested the Bank of Canada’s latest interest rate decision.
As was widely expected, the BoC opted to leave rates unchanged at 2.25% following its July policy meeting.
The bank’s accompanying statement also appeared to signal that policymakers are in no rush to follow some of their peers in tightening monetary policy, as they expect inflation to ease through the second half of 2026 and return to the 2% target in early 2027.
The cautious messaging from the Bank, coupled with a pullback in oil prices from Wednesday’s earlier highs, led investors to largely shun the ‘Loonie’.
Meanwhile, the Pound (GBP) spent Wednesday trading sideways against most of its major peers.
With no major domestic economic releases to provide direction, investors instead focused on developments in the UK bond market.
A steady rise in gilt yields pushed the benchmark 10-year yield close to its highest level in two months, tempering sentiment towards Sterling.
Higher borrowing costs continue to raise concerns that incoming Prime Minister Andy Burnham could face a more challenging fiscal backdrop as elevated financing costs weigh on the UK's economic outlook.
Near-Term GBP/CAD Forecast: Positive UK GDP Print to Strengthen Sterling? Looking ahead, the UK’s latest GDP figures are likely to provide the next major catalyst for the Pound to Canadian Dollar exchange rate.
Economists expect monthly growth to return to positive territory in May, with output forecast to rise by 0.1% after April’s 0.1% contraction.
While a return to growth could support Sterling, any gains may prove limited if the underlying data still points to an uneven economic recovery.
Meanwhile, as the impact of the Bank of Canada’s policy decision fades, attention is likely to return to oil price movements.
Any renewed strength in crude prices could provide support for the commodity-linked Canadian Dollar through the remainder of the week.
The Pound to Canadian Dollar (GBP/CAD) exchange rate slipped on Monday as renewed conflict between the US and Iran lifted oil prices and supported the commodity-linked Canadian Dollar.
At the time of writing, GBP/CAD was trading at CA$1.8931, down around 0.2% on the day.
Latest — Exchange Rates:
Pound to Canadian Dollar (GBP/CAD): 1.891014 (-0.36%)
Euro to Canadian Dollar (EUR/CAD): 1.611545 (-0.28%)
Dollar to Canadian Dollar (USD/CAD): 1.41364 (-0.15%)
DAILY RECAP:
The crude-linked Canadian Dollar (CAD) firmed on Monday as escalating tensions in the Middle East triggered a rise in global oil prices.
After a lull in the fighting on Friday, hostilities between the US and Iran resumed on Sunday following an Iranian strike on a container ship in the Strait of Hormuz. The US responded by attacking Iranian targets, with Tehran further retaliating by targeting US allies in neighbouring Gulf states.
Markets are growing increasingly concerned that the conflict could intensify further, limiting shipping in the region. As a result, oil prices rose around 4% at the open on Monday. Although crude trimmed some of these gains as the session went on, CAD remained supported.
Meanwhile, the Pound (GBP) was mixed on Monday as a lack of UK economic data left the currency rudderless.
Sterling was able to avoid steep losses against the rising Canadian Dollar thanks to ongoing political optimism in the UK, with GBP investors remaining confident that the political uncertainty that has dogged the Pound over the past year was coming to an end.
Near-Term GBP/CAD Forecast: BoE Comments to Impact the Pound? Looking forward, Tuesday’s session starts with a speech from Bank of England (BoE) Governor Andrew Bailey.
Bailey has stuck to a cautious tone in recent weeks, arguing that the bank ought to wait and see how inflation plays out before considering adjusting policy. However, with global energy prices rising amid renewed US-Iran tensions, the Pound could tick higher if the BoE chief strikes a more hawkish chord.
Meanwhile, oil price dynamics are likely to drive the ‘Loonie’. CAD could remain supported if crude continues to climb amid escalating tensions in the Middle East.
The Pound to Canadian Dollar (GBP/CAD) exchange rate edged higher to 1.9015 on Friday as investors looked ahead to Canada's latest Employment Change and Unemployment Rate figures, with the labour market report expected to set the tone for the Canadian Dollar into next week.
Latest — Exchange Rates:
Pound to Canadian Dollar (GBP/CAD): 1.901572 (+0.07%)
Euro to Canadian Dollar (EUR/CAD): 1.619926 (+0.01%)
Dollar to Canadian Dollar (USD/CAD): 1.41623 (-0.04%)
DAILY RECAP:
GBP/CAD held close to one-week highs ahead of Canada's June labour market report.
The pair has risen steadily since the start of July, with Sterling benefiting from a softer US Dollar backdrop and resilient expectations for Bank of England policy.
Although UK business surveys have pointed to slower economic activity, inflation remains above target and markets continue to expect the Bank of England to proceed cautiously with any further interest-rate cuts.
In its latest FX briefing, ING noted that Sterling continues to find support from domestic fundamentals, even as the pace of gains has moderated.
The Canadian Dollar has been more cautious.
Oil prices remain supportive, but investors have been reluctant to take fresh positions ahead of today's employment report.
Canada's labour market surprised strongly in May, with employment increasing by almost 88,000 and the unemployment rate falling to 6.6%, comfortably beating expectations. Markets will now be watching to see whether that strength was sustained into June or whether hiring has begun to cool.
In recent client commentary, Scotiabank said negative sentiment towards the Canadian Dollar has eased, while MUFG highlighted that incoming domestic data will be critical in determining whether markets continue to price another Bank of Canada rate increase later this year.
Near-Term GBP/CAD Forecast: Canada's Jobs Report Takes Centre Stage For Pound Sterling, there are no major UK economic releases due today, leaving broader market sentiment and expectations for Bank of England policy to drive direction.
The spotlight falls firmly on Canada.
Canada's Employment Change and Unemployment Rate are due later today and are widely expected to be the week's key driver for the Canadian Dollar after May's unexpectedly strong labour market report.
A second consecutive month of robust job creation and another low unemployment reading would strengthen the case for the Bank of Canada to remain cautious about easing policy, supporting the Canadian Dollar.
Conversely, a weaker employment report could revive expectations of policy easing and lift GBP/CAD back towards recent highs.
Oil prices will remain another important influence after this week's geopolitical volatility, with further gains in crude likely to underpin the commodity-linked Canadian Dollar.
GBP/CAD climbed to its highest level in a decade this week, reflecting an increasingly powerful divergence between a Pound supported by fading domestic political risks and a Canadian Dollar facing mounting structural headwinds. Sterling continues to benefit from the unwinding of sizeable speculative short positions built ahead of Prime Minister Keir Starmer’s resignation, while Bank of England Governor Andrew Bailey has effectively ruled out near-term rate cuts. With Bank Rate holding at 3.75% versus the Bank of Canada’s 2.25%, the existing yield advantage remains firmly intact. More recently, however, the rally has found an additional and arguably more durable driver: rising uncertainty over Canada’s trade outlook.
The turning point came on July 1, when the Trump administration declined to extend the USMCA at its mandatory trilateral review. Although the agreement remains in force under an annual review mechanism for up to another decade, the decision marks a meaningful increase in long-term policy uncertainty rather than an immediate disruption to trade. Instead of securing another 16-year extension, businesses now face the prospect of recurring negotiations and periodic reviews. That uncertainty could weigh on investment and growth over coming years, reducing the likelihood that the Bank of Canada will need to tighten policy further.
The BoC has already downplayed the inflationary impact of higher energy prices, arguing there is limited evidence that rising oil costs are feeding into broader price pressures. Together, the trade outlook and the central bank’s cautious stance point to a policy bias that is becoming increasingly less supportive for the Canadian Dollar.
Market positioning reinforces that narrative. Speculative bearish bets against the Canadian Dollar have climbed to their highest level since December, while Canada’s two-year yield trades more than 140 basis points below its US counterpart, the widest gap since last May.
Attention now turns to June employment data from Canada due tomorrow, which could determine whether markets further strengthen expectations ahead of the Bank of Canada’s July 15 meeting. Consensus looks for employment to rise by around 10,000 after May’s outsized 88,000 gain, with the unemployment rate holding at 6.6%.
The risks appear asymmetric. A weaker-than-expected report would reinforce the existing bearish narrative by strengthening expectations that the BoC remains firmly on hold or even shifts toward easing eventually. By contrast, an in-line or even moderately stronger report may offer only temporary relief while the broader uncertainty surrounding USMCA continues to overshadow Canada’s medium-term outlook.
Technically, further rise is expected in GBP/CAD as long as 1.8875 support holds. Immediate focus is on medium term rising channel resistance (now at 1.9049). Decisive break there could prompt upside acceleration to 138.2% projection of 1.8017 to 1.8694 from 1.8299 at 1.9235. Break of 1.8875 will delay the bullish case, and bring consolidations first.
In the bigger picture, GBP/CAD is extending the whole up trend from 1.4069 (2022 low). Next medium term target is 61.8% projection of 1.6355 to 1.8912 from 1.8017 at 1.9597.
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The Pound to Canadian Dollar (GBP/CAD) exchange rate climbed to its strongest level in around a decade on Monday as persistently weak oil prices continued to undermine the commodity-linked Canadian Dollar.
At the time of writing, GBP/CAD was trading at CA$1.8971, having eased back slightly after touching a session high of CA$1.8980.
Latest — Exchange Rates:
Pound to Canadian Dollar (GBP/CAD): 1.89894 (+0.16%)
Euro to Canadian Dollar (EUR/CAD): 1.623308 (-0.04%)
Dollar to Canadian Dollar (USD/CAD): 1.42169 (+0.12%)
DAILY RECAP:
The Canadian Dollar (CAD) found itself under pressure on Monday, as weaker oil prices continued to weigh heavily on the commodity-linked currency.
Crude has fallen sharply since the US and Iran agreed an interim peace agreement, allowing shipping to resume through the Strait of Hormuz.
Brent crude – the global benchmark for oil – remains below $72 per barrel, its lowest levels since before the war began in late February and down from its mid-war peak of $113.
This sharp decline in crude has dragged the Canadian Dollar lower in recent weeks, with subdued prices continuing to pressure CAD on Monday.
Meanwhile, the Pound (GBP) enjoyed modest support on Monday as markets continued to unwind the political risk premium that has burdened Sterling in recent weeks.
MP Andy Burnham is largely expected to become the next Prime Minister, without a drawn-out leadership contest unsettling investors.
Burnham has sought to soothe markets since announcing his bid for Labour leader, committing to the government’s existing fiscal rules and laying out ambitious plans for the economy.
GBP investors have responded positively to Burnham’s rhetoric, helping GBP rally as political anxiety eases.
Near-Term GBP/CAD Forecast: Canadian PMI to Aid the ‘Loonie’? Looking forward, Canada’s latest Ivey PMI is due out on Tuesday afternoon. The survey is expected to reveal another acceleration in economic activity in June, with the index forecast to reach its highest level since September 2025, when it hit a 15-month peak.
If the PMI prints as anticipated, the Canadian Dollar could catch bids.
Meanwhile, oil price movements could continue to influence the commodity-linked ‘Loonie’. If crude prices remain subdued, this could offset the potential upside from the PMI results.
As for the Pound, UK data is in short supply on Tuesday, potentially leaving the British currency to trade without a clear direction.
