It's been a quiet day for the Canadian, Mexican and British currencies. The Canadian dollar is flat, despite weak retail sales data. The pound is steady, but we could see volatility this week, as parliament debates the Brexit withdrawal deal.
GBP/USD has posted slight losses on Tuesday. In the North American session, the pair is trading at 1.2945, down 0.11% on the day.
After climbing 2.1% last week, the pound has leveled this week. With parliament debating a withdrawal bill over the next few days, Brexit fever remains high and we could see further volatility from the pound. The government is adamant that the U.K will leave the EU on October 31, so it promises to be a dramatic week.
The pound tested the symbolic line of 1.300 on Monday and I expect this line to be further tested this week. The pound-to-dollar ratio has increased significantly in the month of October, as GBP/USD has jumped 5.1%. Above, there is resistance at 1.3060, which has not been tested since May. On the downside, there is resistance at 1.2870.
USD/CAD is flat in Tuesday’s North American session. Currently, the pair is trading at 1.3090, up 0.01%.
Canada posted soft retail sales in August. Retail Sales declined by 0.1%, compared to a gain of 0.4% a month earlier. The core reading declined by 0.2%, its third decline in four months. Despite the soft data, the Canadian dollar has managed to hold its own against the weak U.S. dollar.
USD/CAD posted gains on Monday, and the pair is putting pressure on the support line of 1.3070. The trend is down, so I expect the pair to break below this level during the week. Below, we find support at 1.3020, which has held since mid-July.
USD/MXN has posted slight losses on Tuesday. In the North American session, the pair is trading at 19.09, down 0.15% on the day.
USD/MXN pushed below support at 19.10 on Tuesday, for the first time since the end of July. The pair has recorded three straight losing weeks, so the trend is down. We could see USD/MXN break below this line later in the week. Below, there is support at the round number of 19.00, which has psychological significance. It has held firm since July 31.
Kenny is an experienced market analyst, with a focus on fundamental analysis. Kenny has over 15 years of experience across a broad range of markets and assets –forex, indices and commodities.