Two trades to watch: EUR/GBP, USD/CAD

EUR/GBP rises, German confidence unexpectedly improves, UK budget in focus. USD/CAD look to BoC rate decision.

Charts (4)

EUR/GBP rises, German confidence unexpectedly improves, UK budget in focus

EUR/GBP is pushing a few pips higher as investors look ahead to the British government’s autumn budget.

Chancellor Rishi Sunak will lay out his tax & spending plans for the coming year whilst the OBR will provide GDP and borrowing forecasts.

 The Euro is being underpinned by stronger than expected German GFK consumer confidence, which unexpectedly rose to 0.9 defying expectations of a -0.5 decline. The report suggests that households continue to support the economic recovery in Germany.

What to expect from the budget

Where next for EUR/GBP?

EUR/GBP has been trending lower since the start of the year. However, the latest leg lower kicked off at the end of September.

EUR/GBP trades below its falling trendline from late September and below its 20 & 50 sma. The RSI is supportive of further losses whilst it remains out of oversold territory.

Support is seen sat 0.8420 the daily low and last week’s low. A break below here could open the door to 0.84 the weekly low and on to 0.8390 the January 2020 low.

On the flip side a move over the falling trendline at 0.8450 and 0.8470 last week’s high and the 20 sma could negate the near-term downtrend and bring 0.85 into focus.


USD/CAD look to BoC rate decision

The Bank of Canada are widely expected to rein in bond purchase at this month’s meeting.

After a strong jobs report and amid rising inflation at 4.4% the BoC are likely to cut monthly bond purchases in half C$1 billion.

A rate hike from the BoE is currently fully priced in for April next year even though the BoC say the rate hike is coming in H2 2022. Any comments surrounding the first interest rate increase could move the Canadian dollar.

WTI oil is easing lower exerting pressure on the loonies. Meanwhile the USD is edging lower ahead of US durable goods data which is expected to decline-1.1% after 4 months of gains.

Learn more about BoC

Where next for USD/CAD?

USD/CAD trades within a descending channel dating back to mid-September. It trades below its 50 & 20 sma and the 20sma has also crossed below the 50 sma in a bearish signal.

However, a recovery could be underway. The bullish crossover on the MACD is keeping buyer’s hopeful. Any recovery would first need to break above 1.24 the upper band of the falling channel and 1.2410 last week’s high. A move beyond here could exposer the 20 sma at 1.2460 and the September low of 1.2490.

On the downside, support can be seen at 1.2340 the weekly low and channel mid-point ahead of 1.2285 the October low.

USDCAD Chart  

How to trade with City Index

Follow these easy steps to start trading with City Index today:

  1. Open a City Index account, or log-in if you’re already a customer.
  2. Search for the market you want to trade in our award-winning platform.
  3. Choose your position and size, and your stop and limit levels
  4. Place the trade.



This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

StoneX Financial Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit for the complete Risk Disclosure Statement.