USD/CAD Forecast Aug. 27-31 – NAFTA Hopes Eternal And GDP -

USD/CAD Forecast Aug. 27-31 – NAFTA Hopes Eternal And GDP

Aug 25, 2018Jeremy ParkinsonFinance0

Dollar/CAD held the same trading ranges once again as the loonie weathered the greenback’s strength amid ongoing NAFTA negotiations. What’s next? Canada’s GDP is eyed. Here are the highlights and an updated technical analysis for USD/CAD.

Canadian PM Justin Trudeau was among the high-ranking officials expressing optimism about a deal on NAFTA, even though a “handshake agreement” between the US and Mexico was denied. Optimism kept the C$ bid. Canadian retail sales slightly disappointed, but it didn’t stop the loonie.In the US, the dollar was hit by Trump’s criticism of the Fed’s rate hikes and also by his legal trouble. On the other hand, the Fed remains hawkish, as seen by the upbeat FOMC meeting minutes.

Updates:

USD/CAD daily chart with support and resistance lines on it. Click to enlarge:

Current Account: Wednesday, 12:30. Canada reported a broad current account deficit of 19.5 billion in Q1 and a slightly narrower deficit is likely now. The current account has a broader scope than the trade balance.

GDP: Thursday, 12:30. Canada publishes GDP growth figures every month rather than on a quarterly basis. However, this publication is for June, concluding the second quarter, making the release more significant than usual. Monthly GDP increased by 0.5% in May and will have likely somewhat slowed down in June.

RMPI: Friday, 12:30. The Raw Materials Price Index is important for inflation and also for Canada’s exports. A relatively minor increase of 0.5% was seen in June and we could see a similar one in July. The Industrial Product Price Index also rose by 0.5% in June.

*All times are GMT

USD/CAD Technical Analysis

Dollar/CAD had a limited range, hugging the 1.3070 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.