Yesterday’s trade saw GBP/CAD within the range of 1.8998-1.9149. The daily high has also been the highest level since March 4th, when a high of 1.9236 was recorded. The pair closed at 1.9037, down 0.44% on a daily basis, or the first loss in the past three trading days.
At 7:51 GMT today GBP/CAD was up 0.03% for the day to trade at 1.9040. The pair touched a daily high at 1.9058 at 7:25 GMT.
Fundamentals
United Kingdom
Balance of Trade
The deficit on United Kingdom’s goods trade balance probably narrowed to GBP 9.700 billion in January, according to market expectations, from a deficit figure of GBP 10.154 billion during the preceding month. The latter has been the most considerable trade deficit since September 2014, when a gap of GBP 10.506 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 sustainability of economic growth.
The gap on the nations total trade balance widened to GBP 2.895 billion in December from a revised GBP 1.80 billion deficit, posted in November. Decembers deficit was boosted by a surge in oil imports.
Exports of goods rose by GBP 0.1 billion to reach GBP 24.6 billion in December. Exports of oil increased GBP 0.2 billion in December, while the volume of oil exports grew 22.7% over the same period, according to the report by the Office for National Statistics (ONS). Imports of goods went up by GBP 0.9 billion in December, mostly reflecting a GBP 0.7 billion surge in imports of fuels. The volume of oil imports rose to the highest level since July 2008, soaring 37.5% between November and December.
In case the UK trade deficit narrowed more than anticipated, this would provide support to the pound. The Office for National Statistics will publish the official trade data at 9:30 GMT.
Canada
New Housing Price Index
Selling prices of new homes in Canada probably rose for a sixth straight month in January compared to December, up 0.1%, according to market expectations. In December compared to November there was another 0.1% increase in prices. Home values climbed at a rate of 1.7% in December compared to December 2013, or matching the annual rate in November, while also being the fastest rate since August 2013. The New Housing Price Index is a key indicator, reflecting the health of Canadian housing market. In case prices surged more than anticipated, this would be an indication of a strong demand and would, therefore, have a bullish effect on the loonie. Statistics Canada will release the official data at 12:30 GMT.
Pivot Points
According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 1.9061. In case GBP/CAD manages to breach the first resistance level at 1.9125, it will probably continue up to test 1.9212. In case the second key resistance is broken, the pair will probably attempt to advance to 1.9276.
If GBP/CAD manages to breach the first key support at 1.8974, it will probably continue to slide and test 1.8910. With this second key support broken, the movement to the downside will probably continue to 1.8823.
The mid-Pivot levels for today are as follows: M1 – 1.8867, M2 – 1.8942, M3 – 1.9018, M4 – 1.9093, M5 – 1.9169, M6 – 1.9244.
In weekly terms, the central pivot point is at 1.9070. The three key resistance levels are as follows: R1 – 1.9243, R2 – 1.9505, R3 – 1.9678. The three key support levels are: S1 – 1.8808, S2 – 1.8635, S3 – 1.8373.
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