Sterling sold off almost half a percent against the Canadian Dollar on Thursday morning after a variety of factors and news reports undermined confidence in the currency.

Sterling's nosedive took market participants by surprise after positive Service's PMI data fueled a short-lived recovery for GBP on Wednesday when it touched 1.6588.

But a 9.0% fall in New Car Sales, a 22% drop in profits at major furniture retailer DFS, a warning that the City would lose many jobs if a Brexit transition deal was not concluded by Christmas and a warning from creidt rating agency Standard and Poors on the economy's outlook mid-week all contributed to weaken the currency on Thursday morning.

Then there are the technical considerations which many taders in the currency market will be observing and basing their decisions.

GBP/CAD continues to sell-off heavily, breaking to new lows as we write, but it is worth asking the question - what are the next downside levels and targets to watch on GBP/CAD?

Now that the pair has broken below 1.65, the next significant target is at the 50-day moving average argues Scotiabank's FX Strategist, Shaun Osborne.

Moving averages are dynamic levels of support and resistance which can 'break the fall' of downtrending prices, leading to them stalling, bouncing or consolidating around their level.

"We look to further weakness through 1.6480 toward the 50 day MA at 1.6369," said the strategist, adding that momentum indicators are "neutral", and that the 200 day MA at 1.6670 is an, "important level of near-term resistance."

Overall Osborne states, "we are bearish GBPCAD."

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