Forex Market: GBP/CAD daily trading forecast

Yesterday’s trade saw GBP/CAD within the range of 1.8967-1.9151. The pair closed at 1.9061, losing 0.16% on a daily basis.

At 8:53 GMT today GBP/CAD was up 0.08% for the day to trade at 1.9074. The pair touched a daily high at 1.9088 at 8:35 GMT.

Fundamentals

United Kingdom

Balance of trade

The deficit on United Kingdom’s goods trade balance probably widened to GBP 9.100 billion in December, according to market expectations, from a deficit figure of GBP 8.848 billion during the preceding month. The latter has been the smallest trade deficit since April, when a gap of GBP 8.812 billion was reported.

This indicator is also known as visible trade balance, because it reflects the difference in value between exported and imported physical goods, without the inclusion of exported and imported services. Since UK economy is to a great extent dependent on trade, the visible trade balance is considered as a key factor, providing clues over the resilience of nation’s economic growth.

The gap on the nation’s total trade balance shrank to GBP 1.4 billion in November from a revised GBP 2.2 billion deficit, posted in October. November’s deficit has been the lowest since June 2013, due to a fall in imports, supported by lower oil prices.

Between October and November last year exports of goods were down by GBP 0.1 billion to reach GBP 24.4 billion. The decline was mainly attributed to lower oil exports (down by GBP 0.2 billion), according to the report by the Office for National Statistics (ONS). Outside the EU, goods exports rose by GBP 0.1 billion. At the same time, imports of goods dropped by GBP 1.1 billion to GBP 33.2 billion during November compared to October, as imports of oil fell by GBP 0.7 billion. Almost all of the decrease in fuel imports was attributed to trade with countries outside the European Union.

In case UK trade deficit widened more than anticipated, this would have a bearish effect on the pound. The Office for National Statistics will publish the official trade data at 9:30 GMT.

Canada

Change in employment, Unemployment rate

The number of the employed people in Canada probably increased by 4 500 in January, according to market expectations. In December the number of the employed dropped by 4 300. Part-time employment decreased by 57 700 in December compared to the same month a year ago, while full-time employment was up by 53 500 during the period. There was a decrease by 33 000 in the number of people employed in accommodation and food services and a drop by 14 000 in the number of those working in “other services” such as private household services provided by nannies and home support workers. Employment in Canadas sector of agriculture rose by 15 000 in December, mostly in greenhouse, nursery and floriculture production. Public administration employment was up by 14 000 during the same month, according to the report by the Statistics Canada. Creation of new job positions is considered of utmost importance for consumer spending. In case employment in the country increased at a faster pace than expected, the Canadian dollar would be supported.

Meanwhile, the rate of unemployment in the country probably remained steady at 6.7% in January. A month ago the jobless rate has been revised up from 6.6% to 6.7%. In November the rate was reported at 6.6% and in October – at 6.5%, which has been the lowest level since November 2008. Lower-than-expected rates of unemployment would have a bullish effect on the local dollar. Statistics Canada is expected to release its official employment report at 13:30 GMT.

Pivot Points

According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 1.9060. In case GBP/CAD manages to breach the first resistance level at 1.9152, it will probably continue up to test 1.9244. In case the second key resistance is broken, the pair will probably attempt to advance to 1.9336.

If GBP/CAD manages to breach the first key support at 1.8968, it will probably continue to slide and test 1.8876. With this second key support broken, the movement to the downside will probably continue to 1.8784.

The mid-Pivot levels for today are as follows: M1 – 1.8830, M2 – 1.8922, M3 – 1.9014, M4 – 1.9106, M5 – 1.9198, M6 – 1.9290.

In weekly terms, the central pivot point is at 1.9020. The three key resistance levels are as follows: R1 – 1.9444, R2 – 1.9705, R3 – 2.0129. The three key support levels are: S1 – 1.8759, S2 – 1.8335, S3 – 1.8074.