United Kingdom – British Bankers’ Association Mortgage Approvals
At GMT 9:30 a.m., the British Banker’s Association (BBA) released its mortgage approvals figure, which measures the number of new mortgages that was approved by its member banks during the past month.
Since BBA represented banks in the United Kingdom collectively controls around 65 percent of the national mortgage lendings, a significant increase in BBA mortgage approvals figure acts as a national indicator. Furthermore, as majority of the home buyers opt to finance their homes through a bank mortgage, this figure acts as a leading indicator of how many qualified buyers are taking up large sums of loans. A higher approvals figure, therefore, means that qualified buyers are optimistic about their financial future, which indicates overall optimism in the economy.
Last month, in October, the BBA approved around 39,100 new mortgages and the forecast for this month was set at a slightly lower figure, 38,500. However, the actual number came out much lower, at 37,100.
Canada – Core Retail Sales
Later, during the afternoon at GMT 1:30 p.m., the Statistics Canada released the month-over-month core retail sales figure, which measures the changes in the total value of sales made by retailers in the country during the previous month.
The core retail sales figure excludes automobile sales. While the total retail sales may provide a complete picture, the highly volatile nature of car sales makes it difficult to compare the data on a monthly basis. Hence, binary options traders consider the core retail sales numbers are to be more appropriate.
Last month, the Canadian core retail sales figure decreased by 0.2% and this month, the forecast was set at a 0.4% increase. The actual figure, nonetheless, came out way short of the market’s expectation, at 0.0% – meaning it remained unchanged over the past month.
Trade Recommendation for the GBP/CAD
After breaking the strong support level around 1.8100 on August 27, the GBP/CAD sharply declined to 1.7535 on September 8. However, the pair found another strong support at this area and soon retraced above the 1.8100 level by October. During the last week, the GBP/CAD price finally broke below the intermediate support level around 1.7875 and re-tested the support around 1.7535 on November 21. During the process, it has created a double bottom chart pattern.
The double bottom is a very popular pattern in binary options trading as it offers a high reward and low risk trading setup. In order to trade this setup, binary options traders should wait for the GBP/CAD price to close below the support level, 1.7535. Once the daily candle or bar closed, it would turn the support into resistance. In that situation, binary options traders should enter a PUT in the GBP/CAD.
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About our Forex Analyst: Asif Imtiaz
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