Forex Market: GBP/CAD daily forecast

During Friday’s trading session GBP/CAD traded within the range of 1.8145-1.8218 and closed at 1.8170.

At 8:02 GMT today GBP/CAD was gaining 0.08% for the day to trade at 1.8184. The pair touched a daily high at 1.8194 at 7:29 GMT.

Fundamental view

United Kingdom

The number of mortgage approvals in the United Kingdom probably dropped to 64 750 in April, according to experts’ expectations, from 67 135 during the prior month. Mortgage approvals are considered as a leading indicator, reflecting the health of country’s housing market. in case the number of mortgage approvals increases more than anticipated, this implies housing sector strength and a positive impulse for overall economy. Therefore, the national currency would also be supported. Bank of England will release the official numbers at 8:30 GMT.

Net lending secured on dwellings in the United Kingdom, which include bridging loans made by banks and other lenders, probably was at the amount of 1.60 billion GBP in May, according to the median forecast by experts. A month ago mortgage lending amounted to 1.72 billion GBP.

Consumer credit in the country probably expanded to 0.700 billion GBP in May from 0.666 billion GBP in April. It represents borrowing by the UK personal sector (individuals only) to fund current expenditures on goods and services, which are a driving force behind economic growth. In case lending to individuals expanded more than expected, this would have a bullish effect on the pound. Bank of England (BoE) is to release the official data at 8:30 GMT.

Canada

Canadian Gross Domestic Product (GDP) probably expanded 0.2% in April compared to March, according to the median forecast by experts, following another 0.1% increase in March compared to February. Canadas economy grew at an annualized pace of 2.1% in March. The GDP represents the total monetary value of all goods and services produced by one nation over a specific period of time. What is more, it is the broadest indicator of a countrys economic activity.

The report on GDP holds a lot of weight for traders, operating in the Foreign Exchange Market. It serves as evidence of growth in a productive economy, or as evidence of contraction in an unproductive one. As a result, currency traders will look for higher rates of growth as a sign that interest rates will follow the same direction. Higher interest rates will attract more investors, willing to purchase assets in the country, while, at the same time, this will increase demand for the national currency. If an economy is experiencing a robust rate of growth, the benefits will eventually affect the end consumer, because of the increased likelihood of spending, while through increased consumer expenditures economy has the potential to expand even further. Therefore, in case Canadian growth outpaced expectations, this would heighten the appeal of Canadian dollar. Statistics Canada is expected to release the official figure at 12:30 GMT.

Technical view

According to Binary Tribune’s daily analysis, in case GBP/CAD manages to breach the first resistance level at 1.8210, it will probably continue up to test 1.8251. In case the second key resistance is broken, the pair will probably attempt to advance to 1.8283.

If GBP/CAD manages to breach the first key support at 1.8137, it will probably continue to slide and test 1.8105. With this second key support broken, the movement to the downside will probably continue to 1.8064.