Forex Market: GBP/CAD daily trading forecast

Yesterday’s trade saw GBP/CAD within the range of 1.9198-1.9328. The pair closed at 1.9260, losing 0.11% on a daily basis.

At 8:54 GMT today GBP/CAD was down 0.17% for the day to trade at 1.9230. The cross touched a daily low at 1.9217 at 8:25 GMT.

Fundamentals

United Kingdom

Construction Purchasing Managers Index

Activity in United Kingdom’s sector of construction probably remained little changed in February, with the corresponding PMI coming in at 59.0, down from 59.1 in January. If so, this would be the 23rd consecutive month, when the gauge was reported in the area above 50.0. The index is based on a survey, encompassing managers of companies, operating in construction sector. They are asked about their estimate regarding current business conditions (new orders, output, employment, demand in the future). Values above the key level of 50.0 signify that activity in the sector has expanded. However, in case the PMI slowed down more than anticipated, this would reduce the appeal of the pound. The Chartered Institute of Purchasing and Supply (CIPS) is to announce the official reading at 9:30 GMT.

Canada

Canadian Gross Domestic Product (GDP) probably expanded at an annualized rate of 2.0% in the fourth quarter of 2014, according to the median forecast by experts, following a 2.8% expansion in Q3 compared to the same quarter of 2013. Canadas economy grew at an annualized pace of 3.6% in Q2, or the strongest since Q3 2011, when a growth rate of 4.2% was reported.

The report on GDP is closely watched by traders, operating in the Foreign Exchange Market, as they will look for higher rates of growth as a sign that interest rates may follow the same direction. Higher interest rates will attract more investors willing to purchase assets in the country, which will increase demand for the local dollar.

In case, however, Canadian economy grew a slower-than-expected pace, this would have a bearish effect on the Canadian dollar. Statistics Canada is expected to release the official figure at 13:30 GMT.

Pivot Points

According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 1.9262. In case GBP/CAD manages to breach the first resistance level at 1.9326, it will probably continue up to test 1.9392. In case the second key resistance is broken, the pair will probably attempt to advance to 1.9456.

If GBP/CAD manages to breach the first key support at 1.9196, it will probably continue to slide and test 1.9132. With this second key support broken, the movement to the downside will probably continue to 1.9066.

The mid-Pivot levels for Monday are as follows: M1 – 1.9099, M2 – 1.9164, M3 – 1.9229, M4 – 1.9294, M5 – 1.9359, M6 – 1.9424.

In weekly terms, the central pivot point is at 1.9347. The three key resistance levels are as follows: R1 – 1.9518, R2 – 1.9730, R3 – 1.9901. The three key support levels are: S1 – 1.9135, S2 – 1.8964, S3 – 1.8752.