We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
EUR/USD
Bullish
Oil - US Crude
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Wall Street
Bullish
Gold
Bullish
GBP/USD
Mixed
USD/JPY
Bearish
More View more
Real Time News
  • 🇯🇵 Household Spending YoY (MAY) Actual: -16.2% Expected: -12.2% Previous: -11.1% https://www.dailyfx.com/economic-calendar#2020-07-06
  • The Dow Jones may rise based on signals from trader positioning, placing the focus on resistance ahead. This is as the S&P 500 pressures a key falling trend line, will it hold? Find out from @ddubrovskyFX here:https://t.co/UvXqX50YIp https://t.co/dtE8NHLW7L
  • Heads Up:🇯🇵 Household Spending YoY (MAY) due at 23:30 GMT (15min) Expected: -12.2% Previous: -11.1% https://www.dailyfx.com/economic-calendar#2020-07-06
  • 🇦🇺 Ai Group Services Index (JUN) Actual: 31.5 Previous: 31.6 https://www.dailyfx.com/economic-calendar#2020-07-06
  • Stocks are off to an aggressive start as Q3 gets rolling as the anti-risk #Yen faces cautious selling pressure Canadian employment data is due this week What else is in store for #JPY in Q3? Check out my outlook here - https://www.dailyfx.com/forex/fundamental/forecast/weekly/jpy/2020/07/04/Japanese-Yen-Q3-Fundamental-Outlook-Dow-Jones-and-SP-500-Eyed.html?CHID=9&QPID=917702&utm_source=Twitter&utm_medium=Dubrovsky&utm_campaign=twr https://t.co/AqzPQwJzzz
  • The ASX 200 and AUD/JPY are at risk of losses as cases of Covid-19 continue to climb in Victoria, Australia’s second-most populous state. Get your #ASX market update from @DanielGMoss here: https://t.co/Jl5QAnyqCJ https://t.co/rqybMcC8qV
  • Heads Up:🇦🇺 Ai Group Services Index (JUN) due at 22:30 GMT (15min) Previous: 31.6 https://www.dailyfx.com/economic-calendar#2020-07-06
  • Texas virus cases increase 2.7% vs prior 4% 7-day average - BBG
  • $USDJPY Daily Pivot Points: S3: 107.3 S2: 107.4 S1: 107.46 R1: 107.56 R2: 107.6 R3: 107.7 https://www.dailyfx.com/pivot-points?ref=SubNav?utm_source=Twitter&utm_medium=DFXGeneric&utm_campaign=twr
  • Good to be back! We started off the week with my #WallStreet index closing above resistance, facing June peaks This is after passing above the 20-day SMA following the 50-day holding Equities seem to be setting up cautiously bullish here $AUDUSD $NZDUSD https://t.co/1NHeKDOHse
CAD Rate Forecast: NAFTA Concerns Ease, Focus on Canadian Jobs

CAD Rate Forecast: NAFTA Concerns Ease, Focus on Canadian Jobs

2018-08-03 21:48:00
Justin McQueen, Analyst
Share:
CAD Rate Forecast: NAFTA Concerns Ease, Focus on Canadian Jobs

Fundamental Forecast for CAD: Bullish

USDCAD Analysis and Talking Points:

  • Bullish CAD as Canadian Data Outperforms US
  • Bond Spreads Tighten in Favour of CAD
  • Eyes on Canadian Jobs Report

See our Q3 CAD forecast to learn what will drive the CAD through the quarter.

Last week, we were bullish on the Canadian Dollar and provided USDCAD remains below 1.30 we see no reason to change this view. The Loonie has continued to enjoy another flurry of strong data points this weeks. Firstly, the most recent GDP data rose above economic forecasts, showing the fastest growth spurt in a year, led by oil prices, while Friday’s trade deficit saw a significant narrowing, consequently supporting the case for another rate hike by the end of this year. Interestingly, recent data has outperformed relative to the US, as shown by the Citi Surprise Index, in which the US index has dipped into negative, relative to Canada which switched to positive, advocating the case for further USDCAD weakness.

US/Canadian Data Outperformance Index

CAD Rate Forecast: NAFTA Concerns Ease, Focus on Canadian Jobs

Interest Rate Differentials Continue to Tighten

Rate hike expectations from the Bank of Canada has continued to firm with around 17bps worth of tightening priced in thus far for the policy meeting in October, while a 25bps rate hike is fully priced in by December. As such, US-CA 2yr yield bond spreads have continued to move in favour of CAD and has breached through the psychological 60bps mark, which has continued to keep USDCAD on the backfoot.

Focus Going Forward for CAD

As we look to next week’s economic calendar, the vocal point for Canada will be the jobs report at the backend of the week, while eyes will also be on headlines regarding NAFTA which continues to present the biggest risk to the Canadian economy.

Next week’s Economic Calendar

CAD Rate Forecast: NAFTA Concerns Ease, Focus on Canadian Jobs

Source: DailyFX

USDCAD PRICE CHART: DAILY TIMEFRAME (December 2017-August 2018)

CAD Rate Forecast: NAFTA Concerns Ease, Focus on Canadian Jobs

Chart by IG

USDCAD Technical Levels

Resistance 1: 1.3000 (Psychological Level)

Resistance 2: 1.3115 (23.6 Fibonacci Retracement)

Resistance 3: 1.3180-1.32 (Resistance Area)

Support 1: 1.2980 (100DMA)

Support 2: 1.2940-50 (Support Area)

CAD TRADING RESOURCES:

--- Written by Justin McQueen, Market Analyst

To contact Justin, email him at Justin.mcqueen@ig.com

Follow Justin on Twitter @JMcQueenFX

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

News & Analysis at your fingertips.