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The GBP/CAD looks like it wants to attempt 1.8777 again.
From a technical perspective, the Pound's recent setback against the Canadian Dollar looks as though it has completed, and a reboot in the rally is forming.
The Pound-to-Canadian Dollar exchange rate (GBP/CAD) trades at 1.8567 on Monday, putting it back above the nine-day exponential moving average (EMA), and signals the selloff of the previous two weeks has ended.
Above: GBP/CAD at daily intervals.
GBP/CAD found buying interest and turned a corner at last Wednesday's 1.8346 low and snapped back higher.
With momentum turning positive again (the RSI is at 60 and pointing higher), GBP/CAD looks as though it intends to make a renewed push for the 1.8777 high printed on March 11.
Will it happen this week? Probably not, although the importance of the midweek tariff announcement means there could be some outsized moves this week.
CAD Relief Rally Possible Midweek
As discussed, the technical setup is constructive, but the fundamental and tactical picture is looking a lot more complicated and we are wary of two way risks heading into Wednesday's tariff announcements.
We note the market has already priced a lot of negative news concerning the tariff headlines, with equities extending a selloff on Monday.
This pressure could reflect traders front-running any bad news in the actual announcement.
Traders will also welcome tariff announcements that show ample room for negotiation and long implementation times, offering CAD the chance of a relief-style rally.
Also, keep in mind that the U.S. has hammered Canada with tariffs, and the focus is about to shift to other countries.
"Tariff focus has shifted away from Canada and towards other regions, probably rightly so. The vast majority of goods imported from Canada are likely to be exempt from tariffs under USMCA," says a weekly FX update from Goldman Sachs.
President Donald Trump said on Sunday that "all countries" are in scope for reciprocal tariffs on April 02.
This suggests there could be more scope for negative repricing elsewhere, pushing CAD out of the spotlight.
The potential for European currencies to come under pressure is particularly elevated, suggesting scope for a GBP/CAD correction lower.
Bad News in the Price
With much bad news 'in the price' of CAD heading into the second quarter, the law of diminishing returns starts to apply to further weakness: more losses from tariff news become harder to come by.
We also note with interest that analysts at Citibank and JP Morgan warn Q2 will see the U.S. Dollar rebound, with analysts confirming they think tariffs will be a supportive factor for the USD, even if price action since February has defied that notion.
This also has implications for CAD as it has underperformed alongside USD in 2025; any USD rebound will also bolster the Canadian unit.
As we said previously, Q2 is ripe for a North American currency comeback.