A pair particularly sensitive to headline news.
One chart of particular interest at the moment is the daily GBPCAD pair. Price has rejected the 100 Daily MA and that is a good place to be able to define and limit our risk. This pair is particularly sensitive to news headlines. Brexit woes hit the GBP and positive NAFTA news hits the CAD. Both of these news headlines are likely to keep coming over the following couple of weeks.
A daily Brexit woe
Hardly a day goes past when some version of Brexit woe isn’t brought across the newswires. Theresa May is facing a virtually impossible task of keeping the Tory party together, while at the same time negotiating her chequers deal with the EU. So, the likelihood of some more hardship for the GBP before it gets any better seems possible. Especially watch the story from May’s Conservative party. Her biggest challenge may actually be at home rather than abroad. However, at the moment the GBP is being bid on the hopes that a deal will be done.
Nearly a Nafta deal
The Canadian dollar has continually had it’s NAFTA resolution kicked down the road. However, the hope of a deal is tantalisingly dangled in front of us. The Canadian negotiations are hopeful at most times, and even Donald Trump has hinted at getting the deal done. However, there has been negative sentiment regarding NAFTA with Trump wanting to rename it and Trudea wanting a ‘good deal’, not just ‘any deal’.
Both of these currencies have large trade deals being negotiated, so this pair is worth having on your radar. There is no specific trade to share, but wanting to show you the key daily level it is at (Bearish engulfing outside bar) and to get us aware to look at the key factors influencing them at the moment. Any strong resolution of the above will give us a key place to put our stops and trading the sentiment on an intraday basis helps us see the big technical and fundamental picture. Bank of England’s Carney is speaking today at 1000GMT.