GBP/CAD Price May Test the Trend Line before Resuming Uptrend

United Kingdom – GDP Second Estimate

On Friday, at GMT 9:30 a.m., the UK’s Office for National Statistics will release the quarter-over-quarter second estimate of the GDP, which measures the changes in the inflation adjusted value of all products and service made in the country over the past quarter.

Since GDP measures the overall productivity in the economy, the second estimate acts as a leading indicator of the actual GDP growth level. Hence, binary options traders consider the UK’s second estimate GDP (q/q) to be an important indicator of the health of the economy.

Last quarter, the second estimate GDP was at 0.5% growth and the forecast for this quarter is also set at an additional 0.5% growth.

Canada – Raw Materials Price Index

Later, at GMT 1:30 p.m., the Statistics Canada will release the month-over-month Raw Materials Price Index (RMPI), which measures the changes in the price of raw materials bought by manufacturers in the country over the past month.

Binary options investors consider the RMPI to be an important leading indicator of consumer inflation in Canada, because if manufacturers pay more to buy raw materials, then ultimately the retail customers end up paying for the higher cost of production.

Over the past several months, the Canadian RMPI has been gradually decreasing. But, in August and September, it came out better than expected. If the current trend continues, it would add additional bullishness to the Canadian Dollar.

Trade Recommendation for the GBP/CAD

GBPCADDaily

The GBP/CAD price remained range bound over the last week and currently the support level around the 2.0190 level is holding the price from testing the long-term uptrend line, which is at a stone’s throw away from the current price level.

As the UK’s GPD second estimate is expected to remain same as last quarter and the Canadian Raw Material Price Index came up over last two months, there is possibility that the GBP/CAD price would test the uptrend line prior to resuming the uptrend.

Under the circumstances, it would be recommended that traders consider placing a PUT order for the GBP/CAD with their US binary options brokers, once the price closes below the 2.0190 level.

Recommended Broker: Porter Finance

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