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- GBP to draw buyers on dips lower says Scotiabank.

- But says correction lower not yet finished on charts.

- Comes as GBP buoyed by prospect of early election.

- And USD/CAD uptrend in danger, says Commerzbank.

- After trendline gives way and CAD eyes more updside.

- A USD/CAD close below 1.30 opens door to 1.20 level.

The Pound-to-Canadian-Dollar rate is consolidating recent gains and although there may still be bumps in the road ahead, it's tipped by strategists at Scotiabank to draw fresh buyers upon any dips lower in the weeks ahead, as the UK heads for its third general election inside five years.

Sterling has risen nearly 4% against the Canadian Dollar in October after Prime Minister Boris Johnson reached an agreement with the EU that has scope facilitate an orderly UK exit from the bloc, and the British currency has built on its earlier gains in recent days even as the nation looks set to head back to the ballot box. Currencies don't normally like the uncertainty that comes with elections but this time is different for the Pound.

A 2019 election, likely to be held between December 09 and 12, would offer investors the certainty over the UK's future economic relationships that they've craved for so long and could even produce a government that has campaigned on a pledge to scrap the Brexit pursuit altogether. However, the biggest driver of Sterling's gains has been an apparent if not decisive banishing of 'no deal' Brexit risk for at least the forseeable future.

"Longer run charts are turning more supportive and daily and weekly trend strength signals are still GBP-supportive. We expect renewed GBP weakness to the 1.66 range in the next few weeks to continue to draw out GBP buyers," says Juan Manuel Herrera, a technical strategist at Scotiabank.

Above: Pound-to-Canadian-Dollar rate shown at daily intervals.

Herrera, who draws his insights from studies of trends and momentum on the charts rather than the goings on in the UK parliament, notes the Pound has "found good bids" upon dips below the 1.67 threshold in recent weeks but says he's convinced that the British currency's downward lurch is over just yet. He's warned of a fall to the 1.66 level in the short-term, which is more than 200 points below the 1.6838 seen Tuesday, but says this should attract fresh buyers

Technical factors on the charts, like those analysed by Herrera, could well dominate and dictate trading in Pound Sterling during the weeks ahead at least until the variouos election campaigns get up and running. Polling numbers for the main parties, not to mention the fluctuating odds of a 'no deal' Brexit, have been important influences on Sterling in recent times and could be again as the election draws nearer.

Pound Sterling has been among the most volatile major currencies in 2019 and Canada's Dollar the best performing, and both those things could remain true for a while yet, not least of all because technical analysts at Germany's Commerzbank are tipping the Loonie to rise even further against its U.S. rival over the coming weeks. They say years-long uptrend in the USD/CAD rate is now in danger and that a weekly close below the 1.30 level would mean a longer-term move to 1.20 is in the cards.

Above: USD/CAD rate shown at weekly intervals, with multi-year trendline displayed.

"USD/CAD has sold off to the 2012-2019 uptrend at 1.3029 – this is now exposed. [A] sell signal on the weekly DMI, weekly MACD below zero both imply that the uptrend is in danger," says Karen Jones, head of technical analysis at Commerzbank, in a Tuesday briefing to clients. "The Elliott wave count on the daily chart is suggesting a rebound is likely to the 38.2% retracement at 1.3163 ahead of further weakness. Longer term a close below 1.30 would trigger the start of a move to the 1.2058 2017 low."

USD/CAD achieved a daily close below 1.3080 last week due to weakness of the U.S. Dollar and strength of the Loonie, and the level coincides with an upward-sloping trendline marked out on the charts ever since 2012. Disruption of this pattern could prove to be psychologically significant for the market, ultimately serving as a harbinger of further gains for the Canadian currency.

Commerzbank's Jones says the directional-movement-indicator on the charts is giving off a 'sell signal' and the moving-average-convergence-divergence indicator isn't offering any comfort in compensation. However, she's not made an explicit call on whether the Loonie will actually achieve break below 1.30 before pushing toward 1.20, and others say the exchange rate is not likely to.

Above: Commerzbank chart of USD/CAD rate at weekly intervals, with multi-year annotations.

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