Two sides are increasing their pressure on Canada to join the agreement after they have reached deal. Autos trade, dispute settlement and agriculture are key issues.
“The deal would have to be tweaked should Canada not join” – stated by Mexico’s economy minister. On the other side, Canada’s Foreign minister will be travelling to Washington today in order to continue negotiations. Minister also stated that Canada will only sign the agreement if it is good for Canada.
USD/CAD dropped heavily breaking consecutively the 1.300 and the 1.2965 support levels, with the 1.3000 turning to resistance, as the pair broke once again the 1.2965 level (during Asian session). We could see the pair rise albeit at a slower pace, should the USD strengthen. We could see the pair aiming if not breaching the 1.3000 resistance line and should it be breached, the way may be open for the 1.3047 resistance barrier. On the other side, we could see it breaking the 1.2965 support line once again, aiming for the 1.2925 support hurdle.
United States and Mexico are close to a common stance on NAFTA. The negotiations are to restart today and we expect to see that they are only few hours away from two sides reaching a common position. On the other side, Canada is waiting for bilateral US-Mexican issues to be resolved. After that Canada should join discussion and the three sides could require further negotiations for a week. Depends on positive headlines and on the outcome of the issue, we should expect to see that the US Dollar get some support.
USD/MXN continued to trade in a sideways manner on testing the 18.92 resistance line. We could see the pair continuing to trade in a sideways manner today also. If the pair rises, it could break the 18.92 resistance line and aim for the 19.05 resistance hurdle. On the other side, we could see it breaking the 18.71 support line and aim for the 18.57 support barrier.
Canada is thinking of introducing a safeguard action on seven steel products. Canada’s government will look into the matter in depth and identify any threats and safeguards will be applied. EU announced its own safeguards in July. Also, on Tuesday, Canadian dollar was the top performer.
USD/CAD war dropping (during the European session) and followed up with the same trend (during the US session). The financial data to be released today in the US session could apply more downward pressure for the pair. Anyway, we could see it move lower to the 1.3059 support level and break it aiming for the 1.3034 support barrier. On the other side, we could see it move towards the 1.3091 and even breach it.