DY: British Pound Remains Bid, Canadian Dollar Underperforms
The GBP/USD jumped to a high of 1.6873 during the overnight trade as the economic docket for the U.K. reinforced an improved outlook for region, and the British Pound remains the best performing against the greenback on Tuesday as the pair continues to bounce back from the low, while the USD/CAD halted the two-day decline as investors scaled back their appetite for risk.
The GBP/USD jumped to a high of 1.6873 during the overnight trade as the economic docket for the U.K. reinforced an improved outlook for region, and the British Pound remains the best performing against the greenback on Tuesday as the pair continues to bounce back from the low. The pound-dollar has moved nearly 62% of its ATR and may push higher throughout the North American trade as the pair finds intraday support ahead of the 100-SMA at 1.6752. As the near-term rally remains well supported by the 20-Day SMA at 1.6558, we may see the pound-dollar continue to retrace the sell-off from August however, as the RSI approaches overbought territory, we may see the pair test the lower bounds of the upward trend line before pushing higher. Nevertheless, as the Bank of England meeting minutes are scheduled for release at 9:30 GMT on Wednesday, we may see the GBP/USD hold a narrow range going into the Asian session as investors weigh the outlook for future policy.
The USD/CAD halted the two-day decline as investors scaled back their appetite for risk, and the Canadian dollar remains the worst performing on the day after moving 92% of its daily average true range. The dollar-loonie is 100+pips higher from the open, and crossed above the 10-Day SMA (1.0564) to reach a high of 1.0594, and the bullish divergence in the daily RSI suggests that the pair may continue to retrace the decline from September as the pair finds near-term support above 1.0400. Nevertheless, as the 30-minute RSI falls back from overbought territory, we may see the USD/CAD continue to push higher throughout the North American trade as the reserve currency benefits from the rise in risk aversion, and may test the 20-Day SMA at 1.0610 for near-term resistance.
