Trading plan for 01/10/2018
The week begins with good news regarding the financial markets. The US and Canada came to an agreement a few hours before the deadline for negotiations. Together with Mexico, these three countries will sign a new trade agreement.
On Monday, the 1st of October, the event calendar looks busy with the important data releases. During the London session, Germany will publish Retail Sales and Import Price Index data, the Eurozone will present PMI Manufacturing data from the UK, France, Italy, Spain and Germany, Moreover, the Unemployment Rate for the Eurozone will be published as well. During the New Your session, the US will publish ISM Manufacturing data and Construction Spending data. There are some spechees scheduled for today from FOMC Member Raphael W. Bostic and Eric Rosengren as well.
USD/CAD analysis for 01/10/2018:
So far, there is not much information about the new NAFTA agreement, which is now to function under the abbreviation USMCA, from the United States – Mexico – Canada Agreement. All information regarding conversations is from anonymous sources for now. After the announcement of the agreement, the Canadian prime minister said it was a good day for the country and that he would soon publish more details. Most probably, it will take place on Monday afternoon. However, the global traders must be careful about these messages. The outcome of the negotiations was defined as “the structure of the agreement”. The Canadian press also describes it as “uncertain” for now. It is known that Trump will sign new arrangements at the end of November. Canada has apparently decided to remove the price system for “7th-grade” milk, thanks to which American dairy will have easier access to the local market. According to commentators close to the topic, the final agreement does not change the foundations of the partnership between the US and Canada. Nor does it concern the tariffs on US steel and aluminum, which are “a separate topic”.
Let’s now take a look at the USD/CAD technical picture at the H4 time frame. The pair opened with a downward gap. The Canadian dollar began to strengthen already on Friday afternoon, and today this move is continued. Early in the morning, there was a weakening of declines and slow uptrend. The price of the pair currently varies around 1.2840.