Forex Market: GBP/CAD daily forecast

During yesterday’s trading session GBP/CAD traded within the range of 1.8366-1.8460 and closed at 1.8422.

At 6:54 GMT today GBP/CAD was adding 0.11% for the day to trade at 1.8432. The pair touched a daily high at 1.8438 at 6:20 GMT.

Fundamental view

United Kingdom

Activity in United Kingdom’s sector of manufacturing probably slowed down in July, with the corresponding PMI coming in at a reading of 57.2, according to the median forecast of experts, down from 57.5 in the previous month, that was the strongest since November 2013. The index is based on a survey, encompassing managers of companies, that operate in sectors such as manufacturing, mining, utilities. They are asked about their estimates, regarding current business conditions in the sector in terms of new orders, output, employment, demand in the future. Values above the key level of 50.0 signify that activity in the sector has expanded. Higher than projected PMI readings would certainly heighten the appeal of the sterling. The Chartered Institute of Purchasing and Supply (CIPS) is expected to announce the official reading at 8:30 GMT.

Canada

The RBC Canadian Manufacturing PMI probably shrank to 53.4 in July, according to the median analysts estimate, from 53.5 in the prior month, that was the strongest since November 2013.

The report on the RBC PMI for Manufacturing in Canada is based on data collected from monthly replies to questionnaires sent to supply managers in over 400 industrial companies. RBC PMI is a composed index based on five individual indexes: new orders, production, employment, delivery time, stocks of purchases. Values of the index above the key level of 50.0 indicate overall increase in the activity in the sector, while readings below 50.0 are indicative of contraction in the sectors activity. PMI studies are earlier indicators of economic conditions published each month, therefore, are available much before the publication of relevant data from government authorities.

Royal Bank of Canada will release an official report at 13:30 GMT. In case, activity in the sector shrank less than expcted, this would boost loonies demand.

Technical view

According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 1.8416. In case GBP/CAD manages to breach the first resistance level at 1.8466, it will probably continue up to test 1.8510. In case the second key resistance is broken, the pair will probably attempt to advance to 1.8560.

If GBP/CAD manages to breach the first key support at 1.8372, it will probably continue to slide and test 1.8322. With this second key support broken, the movement to the downside will probably continue to 1.8278.

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.