Dollar/CAD moved back up, mostly a result of the risk-off atmosphere and also due to a mixed Canadian jobs report. The upcoming week features Canadian inflation and other events. Here are the highlights and an updated technical analysis for USD/CAD.
A local crisis in Turkey became global after the European Central Bank expressed concern about banks’ stability. The risk-off atmosphere already built up by souring US-China relations, pushed the dollar and yen higher across the board. The Canadian dollar, a risk currency, suffered. Canada reported a gain of 54.1K jobs and a drop in the unemployment rate to 5.8%. These upbeat numbers masked an increase in part-time positions and a slowdown in wages. Oil prices did not help the C$. NAFTA talks continue, and this remains positive, but there is no breakthrough between US and Mexico while Canada is waiting on the sidelines.
USD/CAD daily chart with support and resistance lines on it. Click to enlarge:
*All times are GMT
USD/CAD Technical Analysis
Dollar/CAD kicked off the week with another challenge of the lows, dipping below 1.2975 mentioned last week. It then turned sharply higher, closing above 1.31.
Technical lines from top to bottom:
1.3385 was the peak on two occasions in late June. 1.3350 follows close by after serving in both directions in July 2017.
1.3295 held the pair down in mid-July. 1.3220 capped it earlier in the month.
1.3155 capped the pair in mid-August and serves as resistance. 1.3070 was a swing low in mid-July.
Below 1.3000 we find the mid-August trough of 1.2960.
1.2820 was a low point for USD/CAD in early June and the last line, for now, is 1.2730 which supported the pair in May.
I am neutral on USD/CAD
The advance of NAFTA talks is good news for the Canadian dollar and nothing is likely to change on that front in the upcoming week. On the other hand, the risk-off atmosphere could also extend.
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