GBP/USD, USD/CAD, USD/MXN – North American Session Daily ForecastThe Canadian dollar and British pound are higher on Wednesday, despite weak economic numbers. The U.S. dollar has gained ground on the peso, and is moving towards the 20-level, which has psychological significance.
GBP/USD has posted small gains on Wednesday. In the North American session, the pair is trading at 1.2310, up 0.15% on the day.
PMIs Point to Contraction
British PMIs in September pointed to contraction in key sectors. Manufacturing PMI improved to 48.3, but this marked a fifth straight month below the 50-level, which indicates contraction. Construction PMI slowed to 43.3, down sharply from 45.0 a month earlier. Earlier in the week, British GDP for Q2 declined by 0.2%, marking the first time the economy has contracted since 2013.
The pound has been rangebound all week. GBP/USD tested resistance at 1.2320 on Tuesday, but is showing little appetite to mount a sustained attack on this line. Above, there is resistance at 1.2360. Below, there is support at 1.2255.
USD/CAD has posted considerable gains after a lackluster start to the week. In North American trade on Wednesday, the pair is trading at 1.3294, up 0.57% on the day.
Canadian Economy Stalls in July
Canada’s economy failed to show any growth in July, coming at a flat 0.0%. This missed the estimate of 0.1% and marked a 5-month low. The weak reading has raised concerns that third-quarter growth could be softer than expected, which would likely lower investment sentiment towards the Canadian dollar.
USD/CAD has posted considerable gains on Wednesday and has tested resistance at 1.3282. Above, there is resistance at 1.3320, which has held since September 4. On the downside, there is support at the round number of 1.3200.
USD/MXN is slightly lower in Wednesday trade. In the North American session, the pair is trading at 19.78, down 0.18% on the day.
USD/MXN closed above resistance at 19.70 on Monday and is moving closer to resistance at 19.90, which is protecting the symbolic 20.00 level. There is a upward trend line, which started on Monday. On the downside, there is support at 19.20, which has held since August 1. This line has strengthened, with USD/MXN moving higher this week.