Those hoping for higher levels in the pound sterling to Canadian dollar exchange rate are in desperate need of an upside breakout to emerge.

The Canadian Dollar (CAD) has taken current levels to be the point at which it refuses to go no further against the GBP, and indeed, the majority of other major global currencies. We have now seen 7 days of decline for the pair, and further declines can only be assumed.

A look at the Canadian currency complex shows:

The pound to Canadian dollar exchange rate is 0.02 pct in the blue having reached 1.8381.The US dollar to Canadian dollar rate is 0.12 pct lower at 1.1090.The euro to Canadian dollar exchange rate is 0.25 pct lower at 1.5267.

GBP-CAD needs a topside breakout now

The rally enjoyed by the British pound against its Canadian counterpart is well documented, with a steady ascent being enjoyed since October 2013.

But it would seem the ascent has stalled, as noted by Shaun Osborne at TD Securities:

"GBPCAD has been struggling against resistance at 1.8645 over the past two months, leaving the GBP looking perilously close to support at 1.8396. We are still more inclined to view the outlook here as bullish overall—the strong bull trend here remains deeply entrenched on the longer-term charts, at least.

"And the daily setup remains potentially bullish — the wedge pattern the market is confined to is tightening and usually resolves in the direction of the underlying trend.

"But the time for a break out is now, otherwise the formation will start to look too mature and that may mean more sideways range trading and pressure on support just under 1.84. That might leave the GBP exposed to a test of 1.8284, the neckline of a quadruple top."

Outlook for the Canadian dollar today

All indications suggest the outlook remains one of sideways action.

"Another day of sideways trading it seems for the loonie and despite the sterling receiving a boost the Canadian dollar has the upper hand so far this morning. Although the loonie is firmer, we believe sterling has enough support to remain above 1.84 at least ahead of UK retail sales figures due tomorrow," says a note issued by Sasha Nugent at Caxton FX concerning the pound sterling to Canadian dollar.

Meanwhile, the euro is likely to find no joy in the near future.

Stephen Gallo at BMO Capital notes:

"A relatively ‘soft’ EUR is keeping the DXY marginally above 80, and this is placing a bit of a floor underneath the USD.

"With the latest twist in ECB rhetoric, FX investors will probably wait patiently for the release of Eurostat’s Flash CPI estimate on Monday, and this should keep EUR rallies capped between 1.380 and 1.3875 for now.

"The USD’s performance has become increasingly more mixed each morning this week. This has been helped by long USD position covering and lower US yields, relative to their highs immediately after last week’s FOMC."