Hugo
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Hugo in HTO Trading,

GBPCAD: At a critical turning point

China has collapsed in trade surplus, raising fears for UK and the global economy. Yesterday, data showed that China’s outgoing trade tumbled 15% last month, the biggest drop for more than a year and imports were also down, falling nearly 13%.

In the Canadian front low oil prices are threatening the health of its oil and gas sector, which in turn, is causing turmoil in Canada’s economy as a whole. The severe drop in oil prices has made the Canadian dollar one of the worst performing currencies in the world over the past year.

Today on the economic agenda from the UK we have the Consumer Price Index (CPI) in March that is estimated to stay unchanged at 1.2% and the Producer Price Index (PPI) in March is also estimated to stay unchanged at -1.8%.

On yesterday session the GBPCAD rose, bouncing off the daily support at 1.83985 and close near the high of the day. The pair is in a warning phase, trading below the 10 and 50 day moving average. The stochastic in showing an extreme oversold market and is showing some bullish momentum.

Expecting upward move to a key level at 1.89115 on a break above the 10-day moving average (scenario 1) or a break below daily support at 1.82352 could pull the pair down to year low at 1.7850 (scenario 2).