CAD Rattles GBP As UK PMI Crashes to 3 Year Low

Markit Economics reported earlier today that UK manufacturing PMI, which was at 50.7 in March, tumbled hard to a seasonally adjusted level of 49.2 in April. This is the lowest level in the last 3 years, indicating headwinds in UK economic growth.

The FTSE 100 is extending its downtrend, edged down to a three-week low of

6177.70, 1.5% lower than the last close.

The Royal Bank of Canada yesterday reported that Canadian factory PMI for April was up slightly to 52.2 from 51.5 in March, thanks to a rebound in output, new business and employment growth. The latest reading indicates a moderate expansion in Canada’s business conditions.

Market is awaiting comments on monetary policy by BOC Governor Poloz, later today. Also on the cards tomorrow, is the Canadian trade balance for March. It is forecast to come in at a 1.2 billion deficit. The shortfall in February was at 1.9 billion.

In trading on Tuesday, oil prices have pared the recent gains, dropping back due to lingering concerns on output from the Middle East. The global benchmark Brent is down to $45.33 per barrel, 1.4% lower than the last settlement. The price may continue to fluctuate further, as US crude oil inventories for the last week of April will be reported on Wednesday.

gbpcad d1

Fig. GBPCAD D1 Technical Chart

The sterling is on way to keep strengthening against the Loonie for several days, after the pair GBPCAD hit the support of 1.80859 on April 21. The trend signals indicator has been suggesting a selling position for 71 D1 candles with the profit of 18734 from the beginning of the downtrend. The price is supposed to enter the bullish market after some consolidations.

Trade suggestion

Buy at 1.85100, Stop loss at 1.84357, Take profit at 1.86875

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