GBPCAD trending higherBut some consolidation is possible this weekCAD tipped to respond positively to oil price recoveryCA inflation is this week's CAD highlight

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Any rebound in oil prices combined with an upside surprise in Canadian inflation data could offer the Canadian Dollar some support against the Pound and U.S. Dollar over the coming days.

The Canadian Dollar has been under pressure for a number of weeks now and screens as the biggest loser in the G10 complex over one month, with losses associated with a decline in global crude oil prices.

Kristina Clifton, a strategist at Commonwealth Bank, says the Canadian Dollar will remain heavily influenced by oil prices, and any OPEC-inspired recovery in oil prices could offer CAD some support.

"The OPEC+ meeting on 26 November poses an upside risk to oil prices, which will in turn help oil prices and CAD recover," she says in a note.

Beyond oil, this could prove to be an exciting week from a CAD perspective, given the release of inflation numbers on Tuesday, manufacturing figures on Wednesday and retail sales on Friday.

"Another decline in Canadian inflation will reinforce our view that the Bank of Canada’s policy interest rates have peaked," says Clifton.

Canadian CPI inflation is the calendar highlight of the week and is expected to read at 3.2% year-on-year in October, down from 3.8% previously. The 'common' measure of CPI - much favoured by the Bank of Canada - is expected at 4.3%, signifying stubborn domestic price pressures.

Should numbers come in below expectation, markets will bring forward Bank of Canada rate cut expectations, weighing on the CAD.

Such an outcome would boost the Pound to Canadian Dollar exchange rate, which retains a constructive setup with a well-defined uptrend being identified to be guiding price action since September.

Above: GBPCAD at daily intervals, showing the near-term uptrend line. Track GBPUSD with your own custom rate alerts. Set Up Here.

GBPCAD remains above the 200-day moving average, which signifies it is in an uptrend; therefore, any setbacks will be considered temporary.

Setbacks are certainly possible, given the context of the rally flirting with overbought conditions. The Relative Strength Index (RSI) in the lower panel of the above chart is approaching 70, which is the line that signals a move has overextended.

For now, any correction from oversold conditions would likely come in the form of a benign consolidation by GBPCAD.

The trend suggests a move back towards the 2023 highs located around 1.7320 is possible before year-end.

Turning to USD/CAD, the reversal from last week's high near 1.3775 is showing some signs of technical momentum that favours CAD on the intraday chart, according to analyst Shaun Osborne at Scotiabank.

He says the exchange rate should see firm resistance around 1.3750/60 intraday and broader USD losses in the next few days should mean USDCAD has another look at key support at 1.3655/60.

"A break below there should drive more CAD gains in the short run to the 1.34/1.35 range," says Osborne.