US trade representative Lighthizer stated yesterday, that “the NAFTA countries are nowhere near close to a deal”. The statement was made as the Senate’s Thursday deadline passed, to present the U.S. lawmakers with a revamped NAFTA deal. On the other hand, the Canadian prime minister stated that he had a “positive” feeling about the deal, while a Mexican official noted that a deal might be possible by the end of May. Should there be negative headlines about the NAFTA deal, we could see the CAD and the MXN weakening.
USD/CAD rose yesterday breaking the 1.2800 (S1) resistance line. The pair could trade in a rather bullish market today. Such an argument could be supported by possible weak financial data releases for the CAD side and the USD rather strong momentum. Should the bulls continue to be in the driver’s seat we could see the pair breaking the 1.2860 (R1) resistance line and aim for the 1.2915 (R2) resistance hurdle. Should the bears take over we could see the pair breaking the 1.2800 (S1) support line and aim for the 1.2715 (S2) support barrier.
- Support: 1.2800 (S1), 1.2715 (S2), 1.2615 (S3)
- Resistance: 1.2860 (R1), 1.2915 (R2), 1.2985 (R3)
In an effort to appease North Korea’s leader president Trump said that Kim’s security would be guaranteed, in any deal and his country would not suffer the fate of Libya. Trump also distanced himself, from National Security advisor Bolton’s recent comments and stated that he is not pursuing the “Libyan model”. Overall, on the US side preparations for a possible Trump-Kim meeting seem to continue as planned, despite North Korea casting doubt on the meeting per se. Should there be negative headlines for the issue we could see safe havens strengthening.
USD/JPY rose yesterday breaking the 110.45 (S1) resistance line (now turned to support) and testing the 110.95 (R1) resistance line. We see the case for the pair to continue to trade in a bullish market today. Such a scenario could be supported technically by the strong upward trend line incepted since the 26th of March. Should the pair continue finding fresh buying orders along its path we could see it breaking the 110.95 (R1) resistance line and aim for the 111.45 (R2) resistance level. Should the pair come under selling interest we could see it aiming for, or even breaking the 110.45 (S1) support line.
- Support: 110.45 (S1), 109.76 (S2), 109.20 (S3)
- Resistance: 110.95 (R1), 111.45 (R2), 112.15 (R3)
In today’s other economic highlights:
In the European session, we get Germany’s Producer Price Index for April and Eurozone’s Current Account figure for March. In the American session, we get Canada’s CPI and Core CPI rates for April as well as Canada’s Retails Sales growth rate for March. As for speakers, FOMC members Mester and Brainard, as well as Dallas Fed President Kaplan, speak.
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