CAD Bulls Long for NAFTA Deal
USDCAD Analysis and News
- CAD Bulls Longing for NAFTA Deal
- Canadian Data Supports Case for Higher Rates
CAD Bulls Longing for NAFTA Deal
The largest risk to the outlook for the Canadian Dollar is the outcome regarding NAFTA. With a touted deadline of October 1st, the headline risk for USDCAD is high and will turn likely dictate near term price action for the pair. Recent rhetoric has been somewhat positive with source reports signalling that Canada were willing to provide key concessions in order to reach an agreement, consequently the Loonie has firmed in recent trading sessions.
Canadian Data Supports Case for Higher Rates
Given the firm data out of Canada, the BoC has signalled that their willingness to raise rates in the short term, as such, the current BoC tightening path is unlikely to provide a significant amount of support for the Loonie with expectations already high. However, if indeed a NAFTA agreement is reached this could potetially see markets repirce a steeper rate path from the BoC, particularly after Deputy Governor Wilkins affirmed the BoC’s hawkish stance by discussing whether to remove “gradual approach” to current rate guidance.
BoC Rate Hike Expectations
On the data front, eyes will be on the upcoming CPI report, in which a a softer figure could cool bets of an aggressive tightening stance and pressure the Loonie.
USDCAD Technical Overview
Resistance 1: 1.3050 (Psychological)
Resistance 2: 1.3115 (23.6% Fibonacci Level)
Resistance 3: 1.3200 (Psychological)
Support 1: 1.2980
Support 2: 1.2950 (38.2% Fibonacci Level)
Support 3: 1.2910 (200DMA)
USDCAD PRICE CHART: Daily Time Frame (January-September 2018)
USDCAD ANALYST PICK
- USDCAD Short: BoC Wait on NAFTA Deal to Steepen Rate Pathby Justin McQueen, Market Analyst
--- Written by Justin McQueen, Market Analyst
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