Technical analysts at Citi were stopped out of a GBP/CAD long just one day after entering the trade.
Their stop at 1.7925 was hit after the Bank of Canada rate decision.
The pair had been on a non-stop rally since Mark Carney joined the Bank of England but in the past six months began to move sideways and has been declining for the past month. The bearish case I outlined is coming to fruition as the BOC touts improved exports.
As for Citi, overall they were buying a dip in a long-term uptrend and they had some well-defined support and technicals to back them up. It was a reasonable trade idea and the 0.65% loss is hardly fatal. What’s interesting is that now there could be a good technical case for shorts.
GBPCAD daily chart