Agreement between Mexico and USA is going on better. (refers to new rules for auto industry. Consequently, The United States governments recommended tougher rules on vehicle’s construction. Canada saw the possibility there, to for Canada to join the new discussions.
The US Dollar raised, so EUR/USD droped. US dollar is superior over emerging market currencies even as the trade wars carry on.
The currency pair dropped and stabilized between our 1.1580 resistance level and the 1.1510 support level. We could see it moving downwards to the 1.1510 support line and even breaking it moving lower towards the 1.1445 support barrier. On the other side we could see it break the 1.1580 resistance line and aim higher for the 1.1640 resistance barrier.
Saudi Arabia won’t accept criticism from Canada. Canada made criticism on arrests of women’s rights activists. Situation between these countries is not good and it can cause new retaliations that could hurt investment flows between the countries. Saudi Arabia’s central bank have already started pulling back from investments in Canadian assets. Also, Saudi Arabia dismissed the Canadian ambassador and suspended any new business deals. which can lead to further deterioration of the relationship.
USD/CAD stabilized between the 1.30345 resistance level and the 1.30005 support barrier. We can also see it moving downwards to the 1.30005 support line and even breaking it moving lower towards the 1.29726 support barrier. There is also possibility to see it break the 1.30345 resistance line and aim higher for the 1.30591 resistance barrier.
As per media yesterday, high level negotiations pick up again about NAFTA between the US, Canada and Mexico. US president Trump said on Monday, that he talked with Mexico about doing something very dramatic, very positive to reach a trade deal. Most sticking points continue to include car content rules, the expiration clause and Trump’s threats of tariffs on foreign cars. It should be noted that Canada and Mexico remain optimistic about reaching a deal, though an August deadline may seem too soon. Under certain circumstances, further headlines about further progress in the NAFTA negotiations could support CAD and MXN.
USD/CAD dropped yesterday, breaking consecutively the 1.3120 and the 1.3050 support lines, reflecting the strengthening of the Looney and the weakening of the USD. We could see the pair stabilizing today maybe even correcting a bit, however the pair may prove sensitive to any further headlines regarding NAFTA as well as today’s US financial releases. Should the bears be in the driver’s seat, we could see the pair breaking the 1.2985 support line, while if the bulls take over the market we could see the pair breaking the 1.3050 resistance line and aim for the 1.3120 resistance hurdle.