Pound-to-Canadian Dollar Exchange Rate Faces Breakout as Tariff News Is Priced In

The pound-to-Canadian dollar exchange rate has been stuck in a trading range since July, with lower highs forming against the Loonie. This pattern suggests sellers are acting at progressively lower prices while buyers defend the same floor, which often resolves downwards.

According to technical analysis, the market is currently sitting at 1.8818, just eight pips above the shelf at 1.8810 and thirteen below the 21-day moving average at 1.8831. The descending trendline has come down to meet the market, indicating a potential breakout.

Despite the ongoing trade war between Canada and the US, which has seen tariffs imposed on Canadian goods, the Loonie has not reacted strongly. This suggests the tariff news is already priced in.

The Bank of Canada's decision on interest rates on Wednesday is expected to be a hold at 2.25%, with limited prospect of it moving the market. The Labour Force Survey on Friday will provide insights into the Canadian labour market, but its impact may be muted due to the US employment report being released at the same time.