USD/CAD Price Forecast – USDCAD Holds Fort at 1.29 Handle As Trade War Woes Hit Post G7 Summit

The pair has managed to hang on to its gains
Colin First

The Loonie is getting caught in the crossfire of the trade jabs between Trudeau and Trump and the morning’s price action reflects the kind of hit the Loonie can take if those tensions come up to something bigger. Investors and traders are clearly nervous about the developments – and what it may do to a NAFTA deal – and the focus has firmly shifted away from a Bank of Canada rate hike in July. USD/CAD opened with a gap higher today, and tested the 1.3000 handle as it posted a high of 1.3009. However, the pair subsequently fell back as it has done so last week in previous sessions as well after breaching the figure level. The sharp decline comes into focus as a result of continues escalation in dispute between US & Canada post G7 summit proceedings.


Top White House officials accused Canadian PM Trudeau of backstabbing the US after President Trump called him “very dishonest and weak”. Further, the risk sentiment soured as Trump withdrew support for a G7 communique which called for a fair and balanced trade. Looking ahead the FX desks may offer USD on fears the heightened trade tensions may force the Fed to go slow with the rate hikes. As the G7 meeting failed to provide any sparkle the ‘war of words’ between Trudeau and Trump is going to be a key focus for the Loonie in the week ahead – along with oil prices as we get closer to the OPEC and Non-OPEC meetings in Vienna next week.


This is a very light week for the Canadian dollar economic calendar. On Thursday, we’ll see the new house price index for April. On Friday, we’ll see manufacturing shipments for April as well as cross-border securities investments for April. Last week, changes in employment were both below expectations and fell relative to previous monthly figures. 1.3180 was a support line in 2017 and now turns into resistance. 1.3125 is the high point for 2018 so far. 1.3065 was the high point in May and also earlier in the year and with many investors focusing on 1.30 handle that becomes the resistance zone in short term. Expected support and resistance for the pair are at 1.2950 / 1.2920 / 1.2856 and 1.3000 / 1.3040 / 1.3070 respectively.

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.