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

It has been an uneventful Tuesday session, as the Canadian, Mexican and British currencies are content to drift. However, that could change later in the day, as the Federal Reserve is widely expected to lower rates at its monthly policy meeting. As well, the Fed’s rate statement could also impact on the currency markets.
Kenny Fisher


GBP/USD is showing limited movement on Wednesday. In the North American session, the pair is trading at 1.2484, down 0.14% on the day.

Pound Shrugs as U.K. Inflation Dips

Recent CPI releases have been around the 2.0% level, which is the Bank of England’s inflation target. However, August CPI slipped to 1.7%, down sharply from 2.1% a month ago. This release will likely raise concerns at the BoE, as it is the lowest level since December 2016. Core CPI also missed expectations and fell from 1.9% to 1.5%.

Fed Decision Looms

It looks like the Fed will lower rates at the upcoming policy meeting, which would mark back-to back rate cuts. If the Fed does press the rate trigger, the dollar could respond with losses across the board, which would push cable higher. Traders should also keep an eye on the rate statement – a dovish message from Fed policymakers could further weigh on the U.S. dollar.

Technical Analysis

GBP/USD managed to break above resistance at 1.2420 on Tuesday, after the pair posted strong gains. The pound is currently within striking distance of resistance at 1.2510 – the pair tested this line on Tuesday, but was unable to consolidate above it. This line is weak, and we could see the pound test it during the North American session. On the downside, 1.2380 has strengthened in support, with the pound moving to higher ground.

GBPUSD 4-Hour Chart


USD/CAD continues to have a quiet week, as the pair remains rangebound. In Wednesday’s North American session, the pair is trading at 1.3271, up 0.22% on the day.

Canadian CPI Slips

Canada’s key inflation gauge, CPI, contracted by 0.1% in August. The reading of -0.1% marked a sharp drop from a 0.5% gain in July, but the markets had expected a decline of 0.2%. Weaker inflation means a decrease in economic activity, which could weigh on the Canadian currency.

Fed Poised to Lower Rates

The Federal Reserve has strongly hinted that further rate cuts are coming in the fourth quarter, and the Fed is widely expected to cut the benchmark rate at its monthly policy meeting later in the day. The CME Group is predicting a 70% chance of a 1/4 point rate cut. If the Fed does press the rate trigger, the Canadian dollar could take advantage as lower rates make the U.S. dollar less attractive to investors.

Technical Analysis

USD/CAD has remained rangebound this week. The line of 1.3282 remains relevant and is currently providing weak resistance. On Tuesday, the pair managed to test this line, although it failed to consolidate above it. USD/CAD could take another stab on Wednesday and test this line. On the downside, there is support at the round number of 1.3200.

USD/CAD 4-Hour Chart


The Mexican peso is flat in Wednesday trade. In the North American session, USD/MXN is trading at 19.35, down 0.01% on the day.

How Will Peso React to Fed Rate Cut?

All eyes are on the Federal Reserve, which will set the benchmark rate and release a rate statement later on Wednesday. The Fed is widely expected to lower rates for the second time in just over two months. A rate cut makes the U.S. dollar less attractive, but at the same time it could dampen risk appetite and weigh on risk currencies like the Mexican peso. As well, a dovish rate statement could sour the mood of investors and push the peso downwards.

Technical Analysis

The Mexican peso remains rangebound this week. The resistance line of 19.45 remains weak and was tested by USD/MXN on Tuesday. However, the pair appears to have little appetite to test this line on Wednesday. There is immediate support at 0.1920, which has held since August 1. On the upside, there is strong resistance at 19.70.

USD/MXN 4-Hour Chart

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

Top Promotions

Top Brokers

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.