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.
Canadian foreign minister stated that there was good progress on NAFTA key issues. The progress seems to be related to the issue of car making and what constitutes an American car. All sides seem to push for a new NAFTA agreement before July 1st in order to avoid clashing with Mexican elections, and time frames such as mid to end May for an acceptable agreement could be feasible. Any further positive headlines regarding NAFTA could support CAD.
USD/CAD traded in a sideways manner yesterday, breaking the 1.2610 support line twice in the 4 hour chart. We see the case for the pair to drop somewhat today as the financial data due out later on could favor the CAD side. Should the pair come under selling interest it could break the 1.2610 support level again and aim for the 1.2485 support barrier. Should it find fresh buying orders along its path we could see it breaking the 1.2715 resistance level and aim for the 1.2800 resistance zone.
Mexican economy minister Guajardo said that a meeting on Thursday could take place to discuss NAFTA. Though no final decisions are to be met, some progress could be announced at a number of issues. The meeting is to serve more as a starting point for further negotiations. Should there be further positive headlines for NAFTA there could be some turbulence for CAD, right after the BoC decision.
USD/CAD has been trading in a sideways manner for the past week, constantly testing the 1.2610 resistance line. We see the case for the pair to continue to trade in the same manner as the market will start slowly positioning itself ahead of the BoC interest rate decision. Should the bears take over the pairs’ direction we could see it aiming for the 1.2485 support line. Should the bulls take the driver’s seat we could see the pair breaking the 1.2610 resistance line and aim for the 1.2715 resistance barrier.