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.
US trade representative Lighthizer stated yesterday, that “the NAFTA countries are nowhere near close to a deal”. The statement was made as the Senate’s Thursday deadline passed, to present the U.S. lawmakers with a revamped NAFTA deal. On the other hand the Canadian prime minister stated that he had a “positive” feeling about the deal, while a Mexican official noted that a deal might be possible by the end of May. Should there be negative headlines about the NAFTA deal, we could see the CAD and the MXN weakening.
USD/CAD rose yesterday breaking the 1.2800 resistance line. The pair could trade in a rather bullish market today. Such an argument could be supported by possible weak financial data releases for the CAD side and the USD rather strong momentum. Should the bulls continue to be in the driver’s seat we could see the pair breaking the 1.2860 resistance line and aim for the 1.2915 resistance hurdle. Should the bears take over we could see the pair breaking the 1.2800 support line and aim for the 1.2715 support barrier.