Canadian Dollar Improves To 1-Week High

The Canadian dollar has edged lower in the Tuesday session. Currently, USD/CAD is trading at 1.2872, down 0.32% on the day. There are no Canadian indicators on the schedule. In the US, IBD/TIPP Economic Optimism is expected to dip to 55.2 points. On Wednesday, the US releases ADP non-farm payrolls and the ISM Non-Manufacturing PMI.

The tariff battles have continued this week, with China firing the latest shot. On Monday, China responded to recent US tariffs, imposing its own duties on a range of US goods, including frozen pork and wines. This move is bound to escalate tensions between the two economic giants and has raised fears that a new global trade war could be underway. If the tit-for-tat measures continue, both the US and Chinese economies could suffer, which could lead to a global slowdown. Gold is sensitive to geopolitical crisis, as investors tend to snap up safe-haven assets such as gold during times of uncertainty. If tensions worsen between China and the US, gold prices could continue to move upwards.

US President Trump is pushing hard for a NAFTA deal, and reportedly wants Canada and Mexico to sign the dotted line sometime in April. After months of bumpy negotiations, an agreement appears close. The US had threatened to walk away from the talks if its demand were not met. There are some outstanding issues, such as the US demand that all NAFTA-produced cars contain at least 50% US content and Trump’s demand that Mexico pay for a wall on its border with the US. Canada and Mexico had expected the eighth round of negotiations to be held in Washington this week, but no invitation has been sent out from Washington.

USD/CAD Fundamentals

Tuesday (April 3)

  • Tentative – US IBD/TIPP Economic Optimism. Estimate 55.2
  • All Day – US Total Vehicle Sales. Estimate 16.9M
  • 16:30 US FOMC Member Lael Brainard Speaks

Wednesday (April 4)

  • 8:15 US ADP Nonfarm Employment Change. Estimate 206K
  • 10:00 US ISM Non-Manufacturing PMI. Estimate 59.2

*All release times are GMT

*Key events are in bold

USD/CAD for Tuesday, April 3, 2018

USD/CAD Chart

USD/CAD, April 2 at 8:05 EST

Open: 1.2914 High: 1.2924 Low: 1.2865 Close: 1.2872

USD/CAD Technical

S3S2S1R1R2R31.26871.27571.28501.29301.30501.3165

USD/CAD has ticked lower in the Asian and European sessions

  • 1.2850 remains a weak support
  • 1.2930 is the next resistance line
  • Current range: 1.2850 to 1.2930

Further levels in both directions:

  • Below: 1.2850, 1.2757 and 1.2687
  • Above: 1.2930, 1.3050, 1.3165 and 1.3260

OANDA’s Open Positions Ratio

USD/CAD ratio is unchanged in the Tuesday session. Currently, short positions have a majority (54%), indicative of USD/CAD continuing to move lower.

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