Forex Market: GBP/CAD daily forecast

During yesterday’s trading session GBP/CAD traded within the range of 1.8213-1.8334 and closed at 1.8282.

At 7:35 GMT today GBP/CAD was losing 0.02% for the day to trade at 1.8270. The pair touched a daily low at 1.8256 at 6:40 GMT.

Fundamental view

United Kingdom

At 11:00 GMT Bank of England is to announce its decision on monetary policy. The benchmark interest rate will probably be left unchanged at 0.50%. Short-term interest rates are of utmost importance for the valuation of national currencies. In case the central bank left intact or raised borrowing costs, this would have a bullish effect on the sterling.

At the same time, the monthly pace of banks monetary stimulus will probably be left intact as well, at 375 billion GBP. The central bank issues new money in order to purchase gilts from private investors such as pension funds and insurance companies. In case monetary stimulus is increased (in order to further spur economic growth), this will usually devalue nations currency.

Canada

Selling prices of new homes in Canada probably rose 0.2% in January compared to a month ago, following a 0.3% increase in December. The New Housing Price Index is a key indicator, reflecting the health of nations housing market. In case prices surged more than anticipated, this would have a bullish effect on the loonie. Statistics Canada will release the official data 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 1.8340, it will probably continue up to test 1.8397. In case the second key resistance is broken, the pair will probably attempt to advance to 1.8461.

If GBP/CAD manages to breach the first key support at 1.8219, it will probably continue to slide and test 1.8155. With this second key support broken, the movement to the downside will probably continue to 1.8098.