Daily Trade Recommendation

Originally updated: 06:54

Trading Bias: LONG

Currency pair: GBP/CAD

Current Sentiment: Bullish

In today’s trading session we will be focussing on buying opportunities on the GBP/CAD.

Fundamentals:

Buying opportunities on this pair are expecting to present themselves later in the session; we’ve got some positive sentiment on the GBP at present following yesterdays BoE’s quarterly Inflation report – with attention shifting back to gauging a time frame for rate hikes (expQ4 2015).

On today’s economic calendar we have Canadian manufacturing sales – forecasts are slightly higher than previous but previous data has a pattern of falling short of expectations since late 2014 where a surprise to the downside would be additionally negative for the CAD.

We’ve recently had the BoC cut rates followed by frank rhetoric that they are concerned about the economy and won’t hesitate to cut again, the CAD has been under additional pressure driven by the tumble in oil prices.

Trade with caution – keep an eye on oil prices when considering this pair any surge in price action will support the CAD in line with the currencies status as a commodity linked currency.

Technicals:

We expect this pair to rally off during today’s session.

There is strong support at 1.9090 – 1.9120 which could provide trading opportunities should the price pull back. Look for the price to bounce off this level if it retraces back to it.

Remember to be aware of intra-day news as this can very often change the sentiment which makes our trade weaker. Look for any news that could be negative for this pair, which would change the sentiment to bearish.

Other Market Moving News:

Overnight we had commentary from RBA’s governor Stevens – the tone was less dovish than had been anticipated with speculation being the he would subtly hint in his rhetoric that more cuts haven’t been ruled out, this of course provided some support to the AUD driven by mild relief.

Relatively tight ranges with across major crosses and pairs with USD/JPY being of interest looking forward as the currency now trades back below the 119 level.