Forex Market: GBP/CAD daily forecast

During yesterday’s trading session GBP/CAD traded within the range of 1.8454-1.8506 and closed at 1.8479.

At 7:55 GMT today GBP/CAD was losing 0.11% for the day to trade at 1.8460. The pair touched a daily low at 1.8456 at 6:05 GMT.

Fundamental view

Canada

Annualized number of housing starts in Canada probably increased to 177 000 in April from 156 823 in the previous month. Housing starts are considered as a key indicator, reflecting nation’s housing sector’ resilience. In case the number of housing starts rose more than expected, this would provide support to the loonie. Canada’s Mortgage and Housing Corporation will release the official numbers at 12:15 GMT.

In addition, selling prices of new homes in Canada probably rose 0.2% in March compared to a month ago, following a 0.2% increase in February. The New Housing Price Index is a key indicator, reflecting the health of nation’s 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.

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 bank’s 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 nation’s currency.

Technical view

According to Binary Tribune’s daily analysis, in case GBP/CAD manages to breach the first resistance level at 1.8505, it will probably continue up to test 1.8532. In case the second key resistance is broken, the pair will probably attempt to advance to 1.8557.

If GBP/CAD manages to breach the first key support at 1.8447, it will probably continue to slide and test 1.8428. With this second key support broken, the movement to the downside will probably continue to 1.8401.