Dollar/CAD finally dropped to lower ground on the weakness of the USD and rising oil prices. Fears of NAFTA are still with us. The upcoming week features the GDP release. Here are the highlights and an updated technical analysis for USD/CAD.
NAFTA negotiations didn’t blow up, but Canada’s PM Trudeau said his country could abandon it. Canadian GDP came out at 0.4% as expected in November but the biggest driver came from the US: the impressing rise in wages alongside 200K new positions sent the US dollar higher, especially against commodity currencies.
USD/CAD daily graph with support and resistance lines on it. Click to enlarge:
* All times are GMT
USD/CAD Technical Analysis
Dollar/CAD initially moved lower, breaching the 1.2280 level mentioned last week. It then made a bit turnaround but stalled beneath 1.2435.
Technical lines from top to bottom:
1.2790 was the high in mid-November and serves as resistance. 1.2665 was a was a double-bottom in November and works as strong support.
It is followed by 1.26, a round number that worked as resistance in October. 1.2540 capped the pair in early October when it traded in a narrow range.
1.2435 was a cushion for the pair during the month of October. 1.2335 gave support to the pair in late September and it worked well in January 2018.
Even lower, 1.2250 cushioned the pair on its fall in February 2018. It is closely followed by 1.22
Strong support only awaits at 1.2070. The round number of 1.20 is next. And below there, only 1.18.
I am bullish on USD/CAD
The excellent US jobs report could continue supporting the greenback while the loonie could suffer from its own report. In addition, oil prices seem to have peaked. These factors could push USD/CAD higher in the short term. Once the worries about NAFTA subside, things could change.
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