USD/CAD – Canadian dollar calm as investors wait for cues

The Canadian dollar is quiet in the Monday session. Currently, the pair is trading at 1.1353, up 0.12% on the day. On the release front, there are no Canadian indicators, while the U.S released one minor event. On Tuesday, the U.S. posts CB Consumer Confidence. As well, Federal Reserve Chair Jerome Powell testifies before the Senate Banking Committee.

Stock markets have moved higher on Monday, as investors are increasingly optimistic that the U.S-China trade talks will culminate with an agreement. Will the optimism boost the Canadian dollar as well? On Sunday, President Trump waved off the threat of raising tariffs against China on March 1. Trump tweeted that the sides had made substantial progress, and if that trend continued, he would meet with Chinese President Xi. The global trade war has disrupted international trade and dampened global growth, so a breakthrough in the trade talks could fuel a stock market rally and boost the Canadian dollar higher.

The Canadian consumer tightened the purse string in December, as retail sales contracted. Core retail sales and retail sales both declined for a second straight month. Core retail sales fell 0.5%, while retail sales dropped 0.1%. The weak consumer numbers will be further ammunition for the Bank of Canada to remain on the sidelines unless there are clear signs that the Canadian economy is gathering steam. Canadian numbers have been mixed, as the labor market remains strong, while consumer spending and manufacturing numbers have faltered.

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USD/CAD Fundamentals

Monday (February 25)

• 10:00 US Final Wholesale Inventories. Estimate 0.3%
• 11:00 US FOMC Member Clarida Speaks

Tuesday (February 26)

• 10:00 US CB Consumer Confidence. Estimate 124.3
• 10:00 Fed Chair Powell Testifies

*All release times are EST

*Key events are in bold

USD/CAD for Monday, February 25, 2019

USD/CAD, February 25 at 9:45 EST

Open: 1.3137 High: 1.3157 Low: 1.3113 Close: 1.3154

USD/CAD Technical

USD/CAD showed little movement in the Asian session and edged lower in European trade. The pair has reversed directions and posted gains in North American trade

• 1.3125 is providing support
• 1.3200 is the next resistance line
• Current range: 1.3200 to 1.3290

Further levels in both directions:

• Below: 1.3125, 1.3049 and 1.2969
• Above: 1.3200, 1.3290, 1.3383 and 1.3445

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