- GBP/CAD is in a strong uptrend which is forecast to continue

- The pair will probably rise to retouch the 1.84 highs

- Canadian growth data dominates the calendar in the week ahead

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One Pound buys 1.8216 Canadian Dollars on the inter-bank markets at the start of the week, this is less than the monthly high of 1.8413 achieved in the week prior.

Nevertheless, our technical studies of this particular market confirms Sterling does appear to be favoured against the Canadian Dollar, GBP/CAD is rising in a strong bullish trend which is overall likely to extend in the future.

It recently broke above several key levels including the 200-week MA and the May highs and the fact it managed to do so relatively easily is testament to the strength of the uptrend.

Of late the pair it has pulled-back a little, however, falling for four out of the last five days, from a peak at 1.8415 to the current exchange rate at 1.8222.

The pair is also currently trading in between the 10 and 20 moving averages (MAs), which is seen by some analysts as the perfect 'buy zone' for joining an uptrending asset.

The formation of a bullish reversal candlestick pattern in the buy zone would provide added confirmation that the pair was resuming its uptrend and going higher.

This debatably may have already have happened on Friday when the pair formed a doji/hammer candlestick formation in the buy zone, although the colour of the candlestick was red which means it was not a strong bullish sign.

Nevertheless, there is now the possibility that GBP/CAD could start going higher, and a break above Thursday's highs at 1.8295 would, in our view, provide confirmation that the exchnage rate was resuming its uptrend, with an initial target at the previous 1.8415 highs, followed possibly by 1.8500 which is a place many traders will take profit as it is a major round-number.

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Data and Events to Watch for the Canadian Dollar

Canadian GDP rose 0.1% in December and it is expected to rise by the same amount in January.

A greater-than-expected rise might support the Canadian Dollar as it will suggest increased growth and, therefore, probably higher interest rates in the future; and higher interest rates strengthen a currency by increasing inflows of foreign capital.

All the other important releases for the Canadian economy are out at the same time as GDP, including producer prices, which are forecast to rise 0.5% in February from 0.2% in January, raw materials prices and then the budget balance at 17.00.

Data and Events to Watch for the Pound in the Week Ahead

The Pound strengthened last week after a transitional agreement was agreed by the EU in Brussels, which will now see the UK extend its stay by 21 months after the March 2019 deadline, on special terms, whilst a comprehensive trade deal is hammered out.

Brexit headlines are of course impossible to predict as they are generated by politicians and we will be monitoring the newswires for any potential points of interest.

From a purely hard data perspective, the main release is the third estimate of Q4 GDP on Thursday at 8.30 GMT, although the consensus sees little chance of a change from the second estimate of 0.4% growth quarter-on-quarter.

"The more significant interest for next week’s publication will come from the national accounts detail released at this time," says Investec of the GDP release. This will include revisions to data on household income and personal finances in general, which affect overall consumer spending, the biggest driver of growth for the economy.

Should growth be downgraded unexpectedly we would certainly expect a soggy end to the shortened week for the Pound.

Current account data for Q4 is also out on Thursday, March 29, at 09.30, and is forecast to show the deficit widening to -24.0bn from -22.8bn previously.

Traditionally the current account was always seen as a major influence on currency levels but now there appears to be little empirical evidence of a link, so we do not see much volatility arising from this release.

The CBI Distributive Trade Survey for March is out on Wednesday, Mach 28 at 10.00 GMT and will provide the latest data on the retail sector.

"Launched in 1983, this widely followed survey covers questions on sales, orders, stocks, general business situation, employment trends and internet sales," says the CBI website.

Other March data includes Gfk Consumer Confidence, which forecasts to remain at a -10 reading the same as February.

Investec, however, sees a chance of a lift to -8 in March because of rising wages, less job uncertainty, easing inflation, the agreement of a Brexit transition deal and "the uncharacteristically “Tiggerish” Chancellor at his inaugural Spring Statement.

Other data in the week ahead includes mortgage approvals on Monday at 8.30, Nationwide house prices on Thursday at 6.00 (watch for a negative result as this would make two negative months in a row and be bearish for Sterling); business investment on Thursday at 8.30, consumer credit at the same time and mortgage lending also at the same time.

Get up to 5% more foreign exchange by using a specialist provider to get closer to the real market rate and avoid the gaping spreads charged by your bank when providing currency. Learn more here.