The Great Britain Pound (GBP) extended downside movement against the Canadian Dollar (CAD) on Monday, dragging the price of GBPCAD to less than 1.9810 following Canada’s mixed employment figures on Friday. The technical bias remains bearish because of a Lower Low and Lower High in the ongoing wave.
Technically, the daily chart shows that the price is well below a bearish 20 SMA, whilst the technical indicators have resumed their declines after a limited upward correction near oversold levels, maintaining the risk towards the downside.
In the 4 hours chart the price is still below its 20 SMA while the technical indicators maintain their bearish slopes below their mid-lines, supporting additional declines on a break below the mentioned low.
Canada Employment Report
Canada’s economy added 12,000 jobs last month, but the unemployment rate increased slightly to 7.1 per cent because more people were also looking for work. Most of the jobs were part time, Statistics Canada said Friday, with 74,000 new part-time positions created during the month, offset by a loss of 62,000 full-time jobs.
The drop-off in full-time jobs was the largest monthly decline since October 2011. “Other details of the report are also weak,” Scotiabank noted after the numbers came out: “hours worked dropped and the headline is bolstered mainly by gains in self-employed workers.”
The average forecast in a survey of 20 economists polled by Bloomberg was for Canada to have created between 8,000 and 10,000 jobs during the month.
Considering the overall technical and fundamental outlook, buying the pair around current levels appears to be a good strategy in short to medium term if we get a valid bullish reversal candle on four-hour or daily timeframe.