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

The Canadian, Mexican and British currencies are trading sideways on Friday. With no U.S. fundamental releases on the schedule, I expect an uneventful North American session.
Kenny Fisher

GBP/USD

GBP/USD has reversed directions on Friday and has recorded slight losses. In the North American session, the pair is trading at 1.2493, down 0.23% on the day.

Soft Consumer Data Raises Concerns

The British pound has held its own this week, but investors are seeing red after soft August consumer data was released earlier in the week. Consumer inflation slowed to 1.7% in August, its lowest level since December 2016. This was followed by a soft retail sales report, which declined by 0.2%. With the Brexit deadline looming and the U.K. and the EU at odds over their future relationship, consumers are nervous and could hold tight to the purse strings, which would be bad news for the economy and the British pound.

Technical Analysis

GBP/USD started Friday above the 1.2510, but was unable to consolidate and has fallen back into 1.24 territory. The pair could take another stab at breaking above this line, but we can expect it to remain relevant early next week. On the downside, there is support at 1.2420, which was tested earlier in the week. 1.2380 has strengthened in support, with the pound moving to higher ground.

GBPUSD 4-Hour Chart

USD/CAD

USD/CAD has reversed directions on Friday and posted slight gains. Early, in the North American session, the pair is trading at 1.3283, up 0.17% on the day.

Soft Core Retail Sales Weighs on Loonie

Canada wrapped up the week with key consumer spending numbers. Retail sales in July improved to 0.4%, matching the forecast and marking a 4-month high. Core retail sales could not keep up and declined 0.1%, shy of the estimate of +0.2%. This is the second decline in three months, which could raise concerns among investors. The Canadian dollar has responded to these releases with slight losses in the North American session.

Technical Analysis

USD/CAD has tested the 1.3282 line on Friday but this line remains fluid. The pair has failed to consolidate above this level all week, a testament to its resilience as a  resistance line. The next resistance line is at 1.3320, which has held since September 4. On the downside, there is support at the round number of 1.3200.

USD/CAD 4-Hour Chart

USD/MXN

The Mexican peso is trading sideways in Friday trade. In the North American session, USD/MXN is trading at 19.42, down 0.01% on the day.

Peso Steady after Federal Reserve Cut

The Mexican peso showed little reaction to the Federal Reserve rate cut. Investor risk appetite remained solid after Fed Chair Powell said that domestic economic conditions were “favorable” and that the cut was an insurance policy in case the economy loses steam.

Technical Analysis

The Mexican peso has been rangebound throughout the week. The resistance line of 19.45 remains weak but has proven to be resilient, as USD/MXN is clearly having difficulty breaking above this level. Will the pair test this line in the North American session? The next resistance line is at 19.70, which is also the 20-day simple moving average (SMA) that should limit upside movement. On the downside, there is support at 0.1920, which has held since August 1.

USD/MXN 4-Hour Chart

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