USD/CAD – Canadian dollar steady ahead of current account, US GDP

The Canadian dollar has paused from this week’s mini-rally. In Wednesday trade, USD/CAD is trading at 1.2940, up 0.08% on the day. On the release front, Canada publishes current account, with the deficit expected to narrow to C$15.3 billion.  The U.S releases Preliminary GDP for Q2, which is expected at 4.0%. The initial GDP report came in at 4.1% in July. We’ll also get a look at Pending Home Sales, which is forecast to drop to 0.3%. On Thursday, the U.S publishes personal spending and unemployment claims.

With the dramatic news that the U.S and Mexico have reached agreement on a trade deal, the focus now shifts to Canada. Ottawa must now deal with President Trump, who has made no secret that he will demand concessions from Canada before entering into a new NAFTA agreement, or else stick to the bilateral deal with Mexico. Canadian officials are not happy that the two other treaty partners reached a deal without them, as this puts the pressure on Canada to show flexibility, such as lowering dairy subsidies, or risk being left out of the club. Still, the markets are enthusiastic about the deal between Mexico and the U.S, and the Canadian dollar has risen steadily since Friday. If Canada does reach a deal with the U.S, traders can expect the Canadian currency to continue to climb.

Futures flat as Canada re-joins NAFTA talks

Trade talks to dictate next dollar move

USD/CAD Fundamentals

Wednesday (August 29)

  • 8:30 Canadian Current Account. Estimate -15.3B
  • 8:30 US Preliminary GDP. Estimate 4.0%
  • 8:30 US Preliminary GDP Price Index. Estimate 3.0%
  • 10:00 US Pending Home Sales. Estimate 0.3%
  • 10:30 US Crude Oil Inventories. Estimate -0.7M

Thursday (August 30)

  • All Day – German Preliminary CPI. Estimate 0.1% 
  • 3:55 German Unemployment Change. Estimate -8K
  • 8:30 US Personal Spending. Estimate 0.4%
  • 8:30 US Unemployment Claims. Estimate 214K

*All release times are DST

*Key events are in bold

USD/CAD for Wednesday, August 29, 2018

USD/CAD, August 29 at 8:00 DST

Open: 1.2930 High: 1.2945 Low: 1.2903 Close: 1.2940

USD/CAD Technical

S3 S2 S1 R1 R2 R3
1.2733 12733 1.2831 1.2970 1.3067 1.3160

USD/CAD edged lower in the Asian session. The pair has reversed directions in European trade and moved upwards

  • 1.2831 is providing support
  • 1.2970 is the next resistance line
  • Current range: 1.2831 to 1.2970

Further levels in both directions:

  • Below: 1.2831, 1.2733 and 1.2666
  • Above: 1.2970, 1.3067, 1.3160 and 1.3292

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

Market Analyst at OANDA
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, Seeking Alpha and FXStreet. Based in Israel, Kenny has been a MarketPulse contributor since 2012.
Kenny Fisher

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