FxWirePro: GBP/CAD holds cloud support, good to go short on break below

GBP/CAD chart on Trading View used for analysis

• GBP/CAD is trading in a narrow range, holds support at daily cloud.
   
• Risks skewed to the downside for the pound. Premature hopes on Brexit headlines once more gave way to discouragement.
   
• The European Union offered UK Prime Minister Theresa May an Irish border workaround on Tuesday, but the offer falls far short of PM May's current demands.
   
• On the other side, focus now on BoC policy decision. A 25bps hike is widely expected. Clearing the NAFTA roadblock has sealed a third interest rate hike of 2018. 
   
• There is also some speculation that Gov Poloz may choose to accelerate that schedule now that the trade deal is signed.
   
• Technical studies for the pair also support weakness. Stochs are sharply lower and RSI is below the 50 mark.
   
• MACD is on verge of a bearish crossover on signal line and we see rise in volatility on the intraday charts.
   
• Break below cloud could see drag till major trendline support at 1.66 levels. While bounce off cloud and close above 110-EMA (1.7098) could negate bearish bias.

Support levels - 1.6974 (cloud top), 1.6861 (Sept 21 low), 1.66 (trendine)

Resistance levels - 1.7011 (55-EMA), 1.7098 (110-EMA)

Recommendation: Stay short below cloud, SL: 1.71, TP: 1.6860/ 1.6760/ 1.67/ 1.66 

For details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.