GBP/CAD holds near 4-week highs

The Canadian dollar plummeted against all of its major rivals on Wednesday, hit by poor local data as the country released a record merchandise trade deficit of 13.4B for March. Canada's trade surplus with the US fell and at 1.53B, is the smallest since late 1993.

Furthermore, crude oil prices trimmed early gains after the US government reported that commercial stockpiles rose by 2.8 million barrels in the previous week, almost doubling market's expectations.

The Pound was also weak on tepid local data, but the GBP/CAD cross soared to a fresh 4-week high of 1.8661 and ends the day a few pips below it, underpinned by CAD's weakness.

GBP/CAD technical view

“In the 4 hours chart, the technical indicators are beginning to look exhausted towards the upside in extreme overbought territory, but with the price near the highs and well above a bullish 20 SMA, chances of a downward correction during the upcoming hours seem limited,” said Valeria Bednarik, chief analyst at FXStreet. “Additionally, and with the cross now above 1.8500, an interim bottom can be confirmed, signaling further gains towards the 1.8800 region for the upcoming days.”

Support levels: 1.8620 1.8565 1.8510. Resistance levels: 1.8695 1.8750 1.8800.