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USD/CAD – Canadian dollar gains continue, wholesales sales next

The Canadian dollar has posted small gains in the Tuesday session, continuing the trend seen on Monday. Currently, USD/CAD is trading at 1.3023, down 0.16% on the day. In economic news, Canada releases Wholesale Sales. There are no U.S events on the schedule. On Wednesday, Canada releases retail sales reports. The U.S releases Existing Homes and the Federal Reserve will publish the minutes of the July policy meeting.

Will USD/CAD drop below the symbolic 1.30 level? The Canadian dollar has been moving higher since Friday and could drop below 1.30 this week, for the first time since August 7. It’s been a rough August for the Canadian dollar, as the escalating trade war has dampened risk appetite and hurt the Canadian dollar, which is a minor currency. However, the announcement that the U.S and China will hold trade talks in Washington later this week have raised investor confidence and boosted the Canadian currency. If the talks show signs of progress, such as the suspension of a $16 billion tariff scheduled to take effect on August 23, then the Canadian dollar rally could continue.

The Canadian dollar ended the week with strong gains, climbing 0.7 percent. The boost to the currency came from a strong CPI report, which showed a gain of 0.5%. This easily beat the estimate of 0.1% and marked a 5-month high. On an annualized basis, CPI jumped 3.0%, its highest level since 2011. The strong inflation report has raised expectations that the Bank of Canada will raise rates at the September meeting. The likelihood of a quarter-rate hike next month is only 33%, but this rises to 75% for an October hike, if the BoC stays on the sideline next month.

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USD/CAD Fundamentals

Tuesday (August 21)

Wednesday (August 22)

*All release times are DST

*Key events are in bold

USD/CAD for Tuesday, August 21, 2018

USD/CAD, August 21 at 7:15 DST

Open: 1.3043 High: 1.3047 Low: 1.3015 Close: 1.3023

USD/CAD Technical

S3 S2 S1 R1 R2 R3
1.2733 12831 1.2970 1.3067 1.3160 1.3292

USD/CAD ticked lower in the Asian session. The pair is showing little movement in European trade

Further levels in both directions:

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Kenny Fisher

Kenny Fisher [5]

Market Analyst at OANDA [6]
A highly experienced financial market analyst with a focus on fundamental analysis, Kenneth Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities. His work has been published in several major online financial publications including Investing.com, Seeking Alpha and FXStreet. Based in Israel, Kenny has been a MarketPulse contributor since 2012.
Kenny Fisher

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