UK consumer confidence as well as as the Lloyds Business Barometer decreased further in August as Brexit is nearing and uncertainty over which type of Brexit will be delivered remains. The UK labor market remains strong and wage gains are at decade highs, economists expect that consumer borrowed at a stable rate as the housing market shows signs of a bottom. The British Pound has been drifting higher after bouncing off of support levels which pushed the GBPCAD into its next resistance level. Is bullish momentum strong enough for a breakout or will bears force a reversal? This morning’s fundamental analysis will take a look at the breakout potential for this currency pair.
Forex traders will get Canadian GDP data today which is expected to move the Canadian Dollar. Economists anticipate a strong second-quarter performance, but it is not expected to transcend into the third-quarter with June favored to show a Canadian economy grinding to a near standstill. Inflationary pressures are also expected to show an increase for July as measured by the industrial product price index as well as the raw materials price index. How will price action in the GBPCAD be impacted? Subscribe to the PaxForex Daily Fundamental Analysis and join our fast growing community of profitable forex traders!
Here are the key factors to keep in mind today for British Pound trades:
- UK GfK Consumer Confidence: UK GfK Consumer Confidence for August was reported at -14. Economists predicted a figure of -11. Forex traders can compare this to UK GfK Consumer Confidence for July which was reported at -11.
- UK Lloyds Business Barometer: The UK Lloyds Business Barometer for August was reported at 1. Forex traders can compare this to the UK Lloyds Business Barometer for July which was reported at 13.
- UK Nationwide House Prices: UK Nationwide House Prices for August are predicted to increase by 0.1% monthly and by 0.7% annualized. Forex traders can compare this to UK Nationwide House Prices for July which increased by 0.3% monthly and by 0.3% annualized.
- UK Consumer Credit and Net Lending Securities on Dwellings: UK Net Consumer Credit for July is predicted at £1.0B and Net Lending Securities on Dwellings is predicted at £3.7B. Forex traders can compare this to UK Net Consumer Credit for June which was reported at £1.0B and to Net Lending Securities on Dwellings which was reported at £3.7B.
- UK Mortgage Approvals: UK Mortgage Approvals for July are predicted at 66.1K. Forex traders can compare this to UK Mortgage Approvals for June which were reported at 66.4K.
- UK M4 Money Supply: UK M4 Money Supply for July is predicted to increase by 0.2% monthly and by 2.4% annualized. Forex traders can compare this to UK M4 Money Supply for June which increased by 0.1% monthly and by 2.3% annualized. UK M4 Money Supply excluding IOFCs 3-Month Annualized for July is predicted to increase by 2.6% annualized. Forex traders can compare this to UK M4 Money Supply excluding IOFCs 3-Month Annualized for June which increased by 2.5% annualized.
Here are the key factors to keep in mind today for Canadian Dollar trades:
- Canadian GDP: The Canadian GDP for June is predicted to increase by 0.1% monthly. Forex traders can compare this to the Canadian GDP for May which increased by 0.2% monthly. The Canadian GDP for the second-quarter is predicted to increase by 3.0% quarterly and by 1.4% annualized. Forex traders can compare this to the Canadian GDP for the first-quarter which increased by 0.4% quarterly and by 1.4% annualized.
- Canadian Industrial Product Price Index and Canadian Raw Materials Price Index: The Canadian Industrial Product Price Index for July is predicted to increase by 0.4% monthly and the Canadian Raw Materials Price Index is predicted to increase by 1.5% monthly. Forex traders can compare this to the Canadian Industrial Product Price Index for June which decreased by 1.4% monthly and to the Canadian Raw Materials Price Index which decreased by 5.9% monthly.
Should price action for the GBPCAD remain inside the or breakout above the 1.6160 to 1.6260 zone the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 1.6200
- Take Profit Zone: 1.6460 – 1.6545
- Stop Loss Level: 1.6100
Should price action for the GBPCAD breakdown below 1.6160 the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 1.6100
- Take Profit Zone: 1.5875 – 1.5960
- Stop Loss Level: 1.6160
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