- During the session on Monday, we have seen the US dollar drop against the Canadian dollar, perhaps in reaction to the Canadians dropping the DST taxes on American digital service technologies.
- This has Donald Trump fuming on Friday, calling off all talks with the Canadians, and talking about yet another tariff in Canada.
- As Mark Carney has decided to drop those tariffs, traders are betting on the idea that the Americans in the Canadians may be a little closer to working something out than once thought. While I don’t believe that the reality is that it is at least takes one very negative headline off the Canadian dollar.
It’s also worth noting that Tuesday’s Canada Day, suggesting that Canadian banks won’t be speculating in the market on Monday as much either, due to the fact that most Canadians will try to make it a 4 day weekend. This could influence liquidity, and make this pair behave a little bit erratically if there is some type of headline, but at the same time we also have major economic news coming out of the United States at the end of the week in the form of Non-Foreign Payroll numbers.
Technical Analysis
The technical analysis for this pair is obviously very negative in general, but it is worth noting that we are approaching an area that could be thought of as potentially supported, in the form of 1.35. Furthermore, we will get a lot of volatility leader in the week, due to those employment figures, and if the jobs number in the United States comes out hotter than anticipated, that could cause the US dollar to spike a bit as traders are starting to lean toward the idea of multiple rate cuts coming out of the Federal Reserve. There is a 95% chance based on Fed Funds Futures that September will see an interest rate cut, so that is probably something worth paying close attention to. If those on start to drop again, that will almost certainly push the value of the US dollar higher.
Ready to trade our daily USD/CAD analysis? We’ve made a list of the best forex brokers accepting Canadian clients to trade Forex worth using.
Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.