The GBP/CAD exchange rate is quoted at 1.7280 at the start of the new week with markets looking to put a stop to Sterling's recent run lower.

The currency pair has been moving lower through the course of May having gone as high as 1.7783 earlier in the month.

The exchange rate has reached a nexus of key support and resistance levels which are likely to be difficult to break below.

The most important of these is the 50-day moving average (MA) at 1.7170 which sits right below the current level of the exchange rate at 1.7216.

The major, long-term, Trendline (A) is in the 1.7100s and provides a further obstacle to weakness.

We see these levels as being tough ‘nuts’ to ‘crack’ and, therefore, there being a possibility of a correction back up from the lower 1.70s, nevertheless, with no strong signs yet of such a rebound, the mini-downtrend remains intact.

The fact that bearish pressure is mounting appears to be the central thrust of Scotiabank’s Shaun Osborne’s analysis of the pair.

“Extended weakness through the close of the week suggests mounting downside pressure on the GBP and the risk of losses running on towards the 1.70 area. We remain bearish,” said Osborne in a note to clients.

Data to Watch for the Canadian Dollar

Analysts at TD Securities in Canada are optimistic the data will show a 4.0% rise compared to Q1 a year ago, which is above market expectations of 3.7% - such a result would increase demand for CAD.

ING bank says GDP, “looks good” in a note on USD/CAD, which they see at risk of falling below 1.34 (CAD strength USD weakness), however, longer term they see a risk of a renegotiated NAFTA weighing.

“We still see risks to CAD this summer, as the winds of NAFTA negotiations change. And on crude our team remain wary that production cuts and demand increases will be insufficient to offset US shale production,” said ING in a note.

Data to Watch for the Pound

Manufacturing PMI for May is out at 9.30 BST on Thursday, and Construction PMI, out at 9.30 on Friday.

Manufacturing activity is expected to fall to 56.5 from 57.3 – only a deeper decline, however, would be market moving.

Last month Manufacturing PMI reached a 3-year high on the back of a surge in New Orders so the overall view supports a shallower decline if anything.

“We look for PMI to hold onto most of last month’s gains with just a small pull-back 57.0,” said Canadian investment bank TD Securities.

A similar marginal decline to 52.7 from 53.1 is foreseen in construction activity in May, out on Friday, June 2.

House Prices are also out at 7.00 on Thursday.

Of probably more import in terms of sterling’s fluctuations are poll results for the up-and-coming June elections.

The Pound weakened last week after Theresa May’s lead was cut to only 7% from 19%, as the possibility of her having a powerful majority declined.

We watch upcoming polls with interest for signs that the Conservatives have stabilised.

Recall Sterling move sharply higher when May called the election as markets assumed she would be able to secure a stronger majority in parliament that would allow her a strong hand in upcoming Brexit negotiations.

It also provides the prospect for political stability over coming years in which a decent transitional period for Britain's exit from the EU is possible.

A weak government throws all these assumptions into doubt.