Forex Market: GBP/CAD daily forecast

During yesterday’s trading session GBP/CAD traded within the range of 1.8383-1.8452 and closed at 1.8447.

At 7:42 GMT today GBP/CAD was losing 0.01% for the day to trade at 1.8440. The pair touched a daily high at 1.8460 at 5:50 GMT, the pairs strongest since July 15th.

Fundamental view

Canadas Gross Domestic Product (GDP) probably expanded 0.3% in May compared to April, when the economy grew 0.1%. In annualized terms, the economy of the country expanded 2.1% in April. 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 country’s economic activity.

The report on GDP is an important indicator 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 the Canadian dollar.

Statistics Canada is expected to release the official figure at 12:30 GMT.

Technical view

According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 1.8427. In case GBP/CAD manages to breach the first resistance level at 1.8472, it will probably continue up to test 1.8496. In case the second key resistance is broken, the pair will probably attempt to advance to 1.8541.

If GBP/CAD manages to breach the first key support at 1.8403, it will probably continue to slide and test 1.8358. With this second key support broken, the movement to the downside will probably continue to 1.8334.

In weekly terms, the central pivot point is at 1.8314. The three key resistance levels are as follows: R1 – 1.8411, R2 – 1.8467, R3 – 1.8564. The three key support levels are: S1 – 1.8258, S2 – 1.8161, S3 – 1.8105.