On Tuesday the pound/dollar rate slumped to a weekly minimum, but nevertheless didn’t hit the LB line. The pound’s fall was cut short by Canadian statistics. Canadian GDP for Q4 surpassed all expectations.
According to the published report, Canada’s GDP in Q4 of 2014 grew by 2.4% YOY, whereas the market only expected the indicator to be in the 2.0-2.2% region. GDP growth for Q3 was reassessed to 3.2% from its initial 2.8% assessment.
The pound/dollar rate slid from a minimum of 1.5344 to the LB line (1.5392) and is currently trading around 1.5346. We’re seeing the pair returning to its yesterday’s minimum. According to forecasts, I’m considering a scenario in which GDP/USD falls to 1.5332, but only through a little recovery to the 1.5385 level. If the fall hastens at the opening of the European session, without waiting for the release of news the target is looking to shift from 1.5332 to 1.5302. If you’re starting out from a daily period, the closest target is 1.5185.
At 11:30 EET the UK will publish its PMI service index. During the American session it’s worth having a look at the report for the capacity change in non-agricultural sector based on ADP info (15:15 EET), the service ISM (17:00 EET) and the Bank of Canada’s interest rate decision.