USD/CAD steady, hovering around 1.3000 after US data and Trump’s comments

  • CAD lags among commodity-link currencies on Thursday. 
  • DXY heads from lowest close since July weakened by risk appetite. 
  • Trump warns that Canada must make concessions to reach trade deal.

The USD/CAD pair moved all day sideways around 1.3000, consolidating the decline of the previous two trading days. It bottomed at 1.2975 earlier today, after the release of US data but rebounded and peaked at 1.3024. 

US Inflation data came in below expectations for the second day in a row. The CPI rose 0.2% in August, below the 0.3% of market consensus and the annual rate eased from 2.9% to 2.7%. The greenback lost ground across the board after the data and during the last hours it has been able to stabilized. The DXY is falling for the second day in a row and trades at 94.57, the lowest since August 30. The worst performer among majors is the Japanese yen affected by positive market sentiment

Regarding the loonie, it is modestly lower against AUD and NZD, probably affected by the correction in crude oil prices and on the back of US President Trump comments. According to the Wall Street Journal, Trump  told on Wednesday that he wants to rename the North American Free Trade Agreement (NAFTA) to USMC and warned about dropping the C, if Canada fails to make concessions. 

USD/CAD Technical levels 

Intraday the pair is moving sideways but after the recent slide the short-term tone now favors the downside. Today’s consolidation seems normal after a 170 slide in two days. 

To the downside, support levels might be located at 1.2775/80 (Sep 12, 13 low), 1.2950 and 1.2935. On the upside, resistance could be seen at 1.3025 (Sep 13 high), 1.3040 (Sep 11 low) and 1.3075 (Sep 12 high). 
 

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