Dollar/CAD dropped on the calm in NAFTA negotiations and the relative weakness of the US dollar. Can the Canadian Dollar continue forward? Retail sales and inflation stand out on Friday. Here are the highlights and an updated technical analysis for USD/CAD.
Mexico said it is willing to go it alone with the US on a bilateral deal, putting pressure on Canada. NAFTA negotiations continued in slow-motion in Washington. Differences on dairy and arbitration prevail. The US Dollar weakened on no new escalation with China and on weak inflation. Consumer data was already more upbeat.
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 consolidating under 1.3170 (mentioned last week). It then turned sharply lower, dipping temporarily below 1.3000 before climbing back up.
Technical lines from top to bottom:
1.3295 held the pair down in mid-July. 1.3220 capped it earlier in the month.
1.3170 served as resistance in mid-August. 1.3100 is a round number that also capped the pair several times in August.
1.3045 seprated ranges in mid-September and is a pivotal line. Below 1.3000 we find the mid-August trough of 1.2960. 1.2890 is the initial low seen in late August.
1.2820 was a stepping stone on the way up in late May. 1.2730 provided support earlier in May. Lower, 1.2630 held the pair down back in April.
I am neutral on USD/CAD
Everything depends on NAFTA. It is hard to predict the mood of US President Donald Trump. A deal will send the loonie higher and USD/CAD way down. A total breakup of the talks will send the C$ plunging and USD/CAD shooting higher. It’s quite binary.
Our latest podcast is titled Brexit summer blues, trade troubles
Follow us on Sticher or iTunes
- EUR/USD forecast – for everything related to the euro.
- GBP/USD forecast – Pound/dollar predictions
- USD/JPY forecast – analysis for dollar/yen
- AUD/USD forecast – projections for the Aussie dollar.
- Forex weekly forecast – Outlook for the major events of the week.