Dollar/CAD continued moving lower as negotiations for a NAFTA deal advanced nicely. The upcoming week features the all-important jobs report. Here are the highlights and an updated technical analysis for USD/CAD.
The Canadian dollar advanced for another week as positive noises were heard it from NAFTA negotiations, even though most of the progress is seen between the US and Mexico. In addition, Canada’s monthly GDP came out at 0.5% in May, significantly above expectations. In the US, the Fed left rates unchanged as expected and upgraded its wording about the economy. The greenback also enjoyed higher yields and good data.
USD/CAD daily chart with support and resistance lines on it. Click to enlarge:
*All times are GMT
USD/CAD Technical Analysis
Dollar/CAD extended its falls and dipped below the 1.30 level mentioned last week.
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.
1.3125 was a line of support in late June. 1.3065 was a line of support in mid-July. 1.3025 was a swing low in late July.
1.2975 was a low point in early August. Further down, 1.2829 was a stepping stone on the way up in mid-June.
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 bearish on USD/CAD
The positive noises on NAFTA, even if Canada does not get everything it wants, could continue supporting the loonie. In addition, the economy is looking good and the jobs report could give the C$ another boost.
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