GBP/USD, USD/CAD, USD/MXN – North American Session Daily Forecast

GBP/USD

GBP/USD has posted modest gains on Tuesday, erasing the losses seen on Monday. In the North American session, the pair is trading at 1.2471, down 0.31% on the day.

Manufacturing in Trouble as Brexit Looms

A CBI (Confederation of British Industry) report painted a gloomy picture of the manufacturing sector. The report that manufacturers expected orders to fall by 28 points in September, much sharper than the reading of -14 a month earlier. With the U.K. scheduled to leave the EU in just five weeks, we could see dismal data from upcoming manufacturing releases, which could weigh on the British pound.

Technical Analysis

GBP/USD remains rangebound. On the upside, 1.2510 is an immediate resistance line,  which was last tested on Friday and remains relevant. On the downside, there is support at 1.2420. This is immediately followed by support at 1.2380.

USD/CAD

USD/CAD is flat in the Tuesday session. In North American trade, the pair is trading at 1.3258, down 0.02% on the day.

Will U.S. GDP Shake Up the Canadian Dollar?

The Canadian dollar has been drifting since Friday and the lack of activity could well continue on Tuesday and Wednesday. This trend could change on Thursday, when the U.S. releases third-estimate GDP for the second quarter. The estimate stands at an even 2.0%, and an unexpected reading could shake up the sleepy Canadian dollar.

Technical Analysis

USD/CAD tested resistance at 1.3282 on Monday but has not done so on Tuesday, as this line remains intact. This line remains under pressure and could be tested in the North American session. The next resistance line is at 1.3320, which has held since September 4. On the downside, there is strong support at the round number of 1.3200.

USD/MXN

The Mexican peso continues to have a quiet week. In Tuesday’s North American session, the pair is trading at 19.45, down 0.21% on the day. The peso showed little interest in soft U.S. manufacturing and confidence data on Tuesday, and we could see the lack of activity continue until Thursday, when the U.S. releases Final GDP for the second quarter.

Technical Analysis

USD/MXN continues to grapple with resistance at 19.45, a stubborn line which has proven to be a major obstacle for the pair. At the time of writing, this line is fluid and I expect it to remain active in the North American session. The next resistance line is at 19.70. On the downside, there is support at 19.20, which has held since August 1.