Global macro overview for 28/08/2018
The NAFTA trade agreement between the US and Mexico gives rise to mixed feelings for CAD, but USD / CAD is still lower. Mexico wants to join Canada and continue NAFTA, but President Trump is sniffling, so the market is waiting for discounting this news. Despite this, the weakness of USD helped in the violation of the upward trend line pulled from February and the average 100-session. Fundamentally, the president of BoC Poloz during a speech in Jackson Hole over the weekend did not give grounds to bet interest rate hike in September and October remains a more realistic date. It looks like even an impressive GDP reading on Thursday could change the market expectations, but it may be enough to pull the USD / CAD lower.
Let’s now take a look at the USD/CAD technical picture at the H4 time frame. From a technical point of view, the road is open to 1.28, where the bottom band of the short-term channel and the end of May lows meet. From the side of potential impulses, the tripartite trade agreement would remove the uncertainty factor and strengthen CAD. The nearest technical support is seen at the level of 1.28 and the nearest technical resistance is seen at the level of 1.3000.