Pound Drifts Towards Loonie Support Amid Oil Price Fears

The Pound to Canadian Dollar exchange rate is expected to remain on the back foot in the coming week due to firm oil prices and a strong Canadian dollar. The pair has been trading below a falling trendline since July, with losses likely to extend if oil continues its upward momentum.

A sharp fall in the pound against the Canadian dollar seems unlikely as Canada's own economy offers some cover for the British currency. Small business confidence in Canada slid in September and Tuesday's GDP figures are expected to show output stalled in July.

The 21-day moving average has slipped beneath the 100-day, a sign of fading momentum inside a range that has held since early September. Graphical horizontal support at 1.8711 has been holding firm, but rallies have repeatedly failed at graphical horizontal resistance at 1.8810.