Germany’s interior minister said that good progress has been made towards an agreement with Italy, regarding the migration issue. It happened after Italy threatened to veto the EU budget. Earlier this month, there were agreements with Spain and Greece, and we can expect to see maybe similar agreement with Italy too! Also, there is possible progress to ease tensions within the EU, especially with Italy.
EUR/USD rose breaking the 1.1675 resistance line and continued to struggle with the level (Asian session). As the upward trend-line remains intact we maintain our bullish bias, however bearish tendencies and some corrections may occur as the US dollar strengthens due to the developments on the NAFTA issue.
We could see it breaking the 1.1675 resistance line and aim for the 1.1740 resistance level. On the other side, if the pair come under selling interest we could see it reaching out or even break the 1.1623 support line.
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.