For reference, at the time of writing in the final trading session of the week GBP/CAD is unchanged on a day-to-day basis having reached 1.8262. This is down from the week's high of 1.8369 and shows where momentum currently lies.

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Regarding the forecast for the pound to Canadian dollar exchange rate we hear that the pair is testing the 40-day MA which has been more or less pivotal for the cross so far in July.

Analyst Shaun Osborne at TD Securities tells us that the bias from here is lower in the medium term but the longer-term picture remains constructive:

"Intraday charts show some support for the GBP emerging right around the moving average (1.8303 today) but the GBP is perhaps a little more vulnerable to the downside in the near-term.

"Having been capped at the top of the trading range last week, the risk is perhaps for the cross to edge back towards the lower end of the treading range again—or at least the mid/upper 1.81 zone that has supported the cross in the past few months. Longer-term trend momentum studies remain bullishly aligned, suggesting that, for now, GBP weakness should be limited."

BoE not willing to act on rates yet, weighs on GBP

The GBP continues to enjoy positive trading momentum agains the euro and US dollar owing to the view that the Bank of England will soon start raising interest rates.

The BoE’s July meeting minutes however displayed a unanimous decision to keep the bank rate unchanged at the historical low of 0.50%.

This has disappointed those sterling bulls who were hoping for a more hawkish assessment.

The MPC members voted nine-to-zero for no BoE action, yet minutes showed that some officials saw reduced risk in hiking rates.

"This is mostly due to sustainable recovery signs that UK has been sending via recent macroeconomic data. The UK economy is indeed heading towards a sixth consecutive quarter of economic growth, the unemployment rate stands at 6.5%, the lowest over the past 5.5 years. The significant progress shifts the focus to the timing of the policy normalization. While there is no sign of hawkish shift on bank rate action, the Quarterly Inflation Report due next month will bring more clarity on direction BoE may take," says Ipek Ozkardeskaya at Swissquote Research.

The overnight interest rate swaps on SONIA continue pricing in a BoE rate increase by the end of 2014.

"The absence of concrete hawkish shift in the heart of the MPC suggests deeper downside correction in GBP/USD in the short-run. The key support levels are placed at 1.7000/07 (optionality / June 27th low), then 1.6922/23 (June 13/18 support). However the pair trades comfortably in the mid-range of year-to-date uptrend channel (1.6883-1.7356). The mid-run trend is not at risk," says Ozkardeskaya.

Euro exchange rates under pressure

The market reaction to soft US inflation reading has been somewhat interesting in EUR/USD.

The US CPI ex-food and energy accelerated at the slower pace of 0.1% in month to June (vs. 0.2% exp. & 0.3% last), the CPI y/y (ex-food & energy) retreated to 1.9%.

The G10 gave mixed reaction: USD sold-off against the antipodeans and the yen, yet gained versus EUR, GBP and CHF.

"The heavy selling pressures on EUR finally broke EUR/USD support at 1.3477 (former year-to-data low), taking the pair down to 1.3455 in the continuation of long-liquidation. Both technicals and fundamentals suggest the extension of softness moving forward. The next key support is placed at a distant 1.3296 (Nov 7th 2013 low)," say Swissquote Research.