GBP/USD, USD/CAD, USD/MXN – Daily Forecast

Brexit turmoil, oil prices and August U.S job reports on minds of investors
Kenny Fisher


Pound surges as Parliament Reject Election Bid

There was more drama in Parliament on Wednesday, as lawmakers voted in favor of a bill which would prevent the UK from crashing out of the European Union without a deal. The bill will now move on to the House of Lords, which is expected to ratify it on Friday.  Parliament also voted down an attempt by Boris Johnson to call a snap election. Despite the political turmoil in Westminster, the pound has stormed higher. The currency surged on Wednesday, gaining 1.2%. The pair has gained 0.65% in Thursday trade.

Technical Analysis

GBPUSD 4-Hour Chart

The volatility continues this week for the pound, which posted sharp gains on Wednesday and has moved higher on Thursday. Will the rally continue?

On the upside, 1.2329 was tested earlier on Thursday and remains under strong pressure. Above, there is resistance at 1.2420.

I am keeping an eye on 1.2180, which has some breathing room in support.


Canadian Dollar Slips Despite Higher Oil Prices

The Trump administration continues to tighten its chokehold on Iran, as the White House announced new sanctions on Tehran. These measures are aimed specifically at Iran’s oil exports, and take aim at a shipping network that Iran uses to sell oil. The move was the catalyst for a sharp rise in oil prices, as it is becoming increasingly difficult for Iran to sell oil on world markets. This has reduced the global supply of oil and is putting upward pressure on oil prices. On Wednesday, oil responded with strong gains. U.S. West Texas Intermediate for October delivery jumped 3.8% to close at $56.00, its largest one-day gain since mid-June. However, this was of little help to the Canadian dollar, which dropped sharply, losing 0.85% on Wednesday. USD/CAD has steadied in Thursday trade.

U.S. crude oil inventories declined by 4.2 million, a sharper decline than the estimate of a decline of 2.4 million. Still, the drop in supply failed to boost the Canadian currency.

Ahead – Canadian and U.S. Employment Reports

On Friday, both Canada and the U.S. will release employment numbers, and this could have a strong impact on the movement of USD/CAD. In the U.S. wage growth is expected to remain unchanged at 0.3%, while nonfarm payrolls are projected to dip to 160 thousand. On the Canadian side, the economy is expected to create 18.9 thousand jobs, after two successive declines. If the estimate is accurate, the Canadian dollar could post strong gains.

Technical Analysis

USD/CAD 4-Hour Chart

USD/CAD posted sharp losses on Wednesday, as the pair tested the round number of 1.32. This line remains relevant, and finds itself in a support role in Thursday’s North American session. After starting the day with losses, USD/CAD has recovered. Still, it’s too early to tell if this retracement upwards is just temporary.


The Mexican peso has not been immune from this week’s volatility in the currency markets. USD/MXN has declined by 2.0% this week. Interestingly, this is shaping up to be the first week in the red for the pair since July. The peso has posted steady gains since late August, but these hard-won gains have been wiped out in the past two days. What’s next for the peso? The currency is range-trading on Thursday, but this could turn out to be a temporary respite before the peso slide continues. Barring a complete reversal, it looks like this will be a week to forget for the Mexican currency.

On the fundamental front, U.S. employment numbers on Friday could have a major impact on the movement of the pair. Traders should keep a close eye on wage growth and nonfarm employers, both of which should be treated as market-movers. Wage growth is expected to remain unchanged at 0.3%, while nonfarm payrolls are projected to dip to 160 thousand. If these numbers prove to be stronger than expected, it would point to stronger economic growth in the U.S., and higher risk appetite could boost the Mexican peso.

Technical Analysis

USD/MXN 4-Hour Chart

There is a clear downward trend line in the movement of USD/MXN, which began earlier in the week. The pair has leveled on Thursday – is this a buying opportunity? It’s unclear when USD/MXN will break out of this range. I would counsel patience at this stage, especially when dealing with a risk currency like the Mexican peso.

Don't miss a thing!
Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.