Kenny Fisher | Jun 01, 2018 08:45
The Canadian dollar is almost unchanged in the Friday session. In the North American session, USD/CAD is trading at 1.2959, up 0.02% on the day. On the release front, Canada releases Manufacturing PMI. In the U.S., the focus is on employment numbers, and traders should be prepared for movement from USD/CAD in the North American session. Nonfarm Payrolls are expected to climb to 189,000 and wage growth is forecast to edge up to 0.2%.
After a brief hiatus, the markets are again facing the nasty reality of a trade war between the U.S. and its major trading partners. On Thursday, the Trump administration made good on its threats and imposed stiff tariffs on the European Union, Mexico and Canada. The EU and Canada fired back quickly, saying they would retaliate with tariffs on U.S. products. The U.S. had granted all three trading partners a temporary extension, but cited insufficient progress on trade talks as the reason for the tariffs. There are renewed fears that these moves could trigger a global trade war, which could be disastrous for the Canadian economy.
The Canadian dollar has been on a roller coaster this week. The currency dropped sharply on Wednesday but has reversed directions on Thursday after a positive take of the economy from the Bank of Canada. The bank statement noted that inflation was higher than expected and the export sector remained robust. As expected, the bank maintained the benchmark rate at 1.25 percent. Inflation has moved closer to the BoC target of 2 percent and economic growth has been steady, so the BoC will be giving serious consideration to a rate hike this summer. Some analysts are even predicting that the bank will raise rates twice in the second half of 2018.
USD/CAD Fundamentals
Friday (June 1)
*All release times are DST
*Key events are in bold
USD/CAD for Friday, June 1, 2018
USD/CAD, June 1 at 7:55 DST
Open: 1.2956 High: 1.2967 Low: 1.2931 Close: 1.2959
USD/CAD Technical
S3 | S2 | S1 | R1 | R2 | R3 |
1.2757 | 1.2850 | 1.2943 | 1.3015 | 1.3125 | 1.3224 |
USD/CAD has broken through two resistance line on Friday. In the Asian session, the pair edged higher before recovering. USD/CAD has been marked by choppy trade in the European session
Further levels in both directions:
OANDA’s Open Positions Ratio
In the Friday session, USD/CAD ratio is showing long positions with a majority (63%). This is indicative of USD/CAD breaking out and moving higher.
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